PRIVATE BUSINESS

Bournemouth Borough Council Bill [ Lords]

Order for Second Reading read.
	 To be read a Second time on T uesday 15 January .

Manchester City Council Bill [ Lords]

Order for Second Reading read.
	 To be read a Second time on Tuesday 15 January.

Oral Answers to Questions

FOREIGN AND COMMONWEALTH OFFICE

The Secretary of State was asked—

Diplomatic Service (Closures)

Mark Pritchard: How many UK embassies and diplomatic missions were closed in 2007.

David Miliband: No UK embassies closed in 2007. Two diplomatic missions were closed: the high commission office in Kingstown, St. Vincent and the Grenadines, and the British consulate in Nagoya, Japan.
	We continue to manage the Foreign and Commonwealth Office's overseas network to reflect changing demands and challenges. We will ensure that our resources are aligned with our priorities and that the UK has a cost-effective and flexible network of overseas representation around the world.

Mark Pritchard: Since 1997, when the Government came to power, more than 35 embassies, high commissions and sovereign posts have been closed. Given the Chinese scramble for Africa, is it right that out of 53 African countries, 23 do not have any British diplomatic representation at all?

David Miliband: It may help the House if I give it the actual facts, rather than the partial presentation given by the hon. Gentleman. In 1997, the UK Government had 242 overseas posts. In 2007, there were 261. In the past 10 years, the number of overseas posts has increased by 19 by any calculation.
	In respect of the situation in Africa, I think that the hon. Gentleman will agree that a measure of a country's commitment to Africa or its engagement is not the number of posts but the effectiveness of its activities, including its funding. By no stretch of the imagination is it possible to argue that the UK's influence in Africa is lower today than it was 10 years ago. In fact, it is massively enhanced. There has been cross-party agreement about the activities of the Government on this issue over the past 10 years.

Mark Hendrick: How does my right hon. Friend determine the relationship between the Government's Foreign Office priorities and the resources at their disposal in deciding which diplomatic missions to keep open?

David Miliband: The most important criterion is that the Foreign Office's network is aligned to the shape of the modern world rather than the world as it was after 1945. There has already been a 20 or 25 per cent. reduction in the number of personnel deployed in Europe, which in part reflects the amount of extra business done in UKRep—the UK Permanent Representation to the European Union—in Brussels and the multilateral engagement that we have. I see that continuing, with the shifting of more of our diplomats—UK staff and locally engaged staff—towards the middle east and south Asia, where, by any stretch of the imagination, we need more representations to meet all the national interests that we have at the moment. That seems to me to be the alignment of people and priorities that we should be seeking.

James Duddridge: What consideration has the Secretary of State given to accrediting Department for International Development staff in countries where there is no Foreign Office support, particularly in Africa, in countries such as Lesotho and Swaziland, where there are excellent DFID staff?

David Miliband: Of course, in most of Africa DFID and FCO staff work side by side. Many of the problems that DFID focuses on are complementary to the work on conflict prevention or good governance that is at the heart of the FCO's work. On the accreditation of staff—I do not know whether the hon. Gentleman means that technically—DFID staff, like Foreign Office staff, are there to represent the whole UK. They do that extremely effectively.

Ann Clwyd: As my right hon. Friend knows, my particular concern is East Timor, and the closure of the embassy there in 2006 and the removal of our remaining staff in 2007. East Timor is a country that is emerging out of considerable conflict and it needs a lot of help. I know that there is an ambassador in Jakarta and that the intention is that the ambassador and his staff should visit East Timor. However, given the continuing concern in East Timor, can my right hon. Friend tell me how often the ambassador has been there since the closure of the embassy?

David Miliband: My right hon. Friend has anticipated some of my answer. I do not have to hand the number of times that the ambassador in Jakarta and his staff have visited East Timor, but I shall be very happy to provide her with that information.

Keith Simpson: The Foreign Secretary has been somewhat creative with his figures in respect of embassies, high commissions and consulates. He says that their numbers reflect how the world is changing, so I presume that the closure of the Foreign and Commonwealth Office language school and the withdrawal of the FCO's contribution to the cost of maintaining defence attachés are also connected with that. Do not the figures given by my hon. Friend the Member for The Wrekin (Mark Pritchard) have more to do with financial cuts imposed by the Treasury than with any changes in the nature of the world? After all, the Select Committee on Foreign Affairs has said that the Foreign Office budget will see a reduction of 5.1 per cent. per annum across the board and that that will jeopardise its work. Can the right hon. Gentleman tell us how many more embassies, high commissions and consulates have been identified for closure over the next two years to pay for those cuts?

David Miliband: It is very odd to define increased spending as cuts. The increased spending over the next period will be used in the areas of greatest need. Moreover, it is right that we do not use defence attachés for non-defence work, as they are specialists and should work on defence matters. The hon. Gentleman accuses me of creative accounting, or at least creative number work, but he may be interested to know that Germany has 226 posts, the US 262 and France 275. The UK holds a diplomatic network of outstandingly qualified individuals who work closely with DFID and British Council staffs. They provide a network that, in times of crisis, has shown itself to be more than adequate for the country's needs. I am sure that he will seek to criticise the Government about many things, but I believe that we should all be proud of the nature of our global network and its deployment around the world.

Environmental Protection (Lisbon Treaty)

Kerry McCarthy: What discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on the effect of the provisions to the treaty of Lisbon on the ability of EU member states to agree effective policies on environmental protection.

Jim Murphy: Tackling climate change is recognised as a specific objective of EU policy for the first time in the Lisbon treaty. The treaty also includes welcome proposals to liberalise energy markets and promote energy efficiency.

Kerry McCarthy: I thank my hon. Friend for that response. I very much welcome the fact that tackling climate change is now a specific EU policy objective and that we have the necessary legal framework for it, but does he agree that we also need greater international co-operation to meet EU-wide targets on climate change? What progress is being made on that front?

Jim Murphy: My hon. Friend is right. She takes a keen interest in these matters, and will know that article 2 of the Lisbon treaty states that the EU will
	"contribute to...the sustainable development of the earth".
	That is a remarkable change in the EU's posture. We are making real progress on reducing carbon emissions: we have set a target for reductions totalling 20 per cent. by 2020, and have also established a number of demonstration plants for carbon capture and storage. Progress must also be made through other organisations, such as the G8, the World Bank and the UN, but the EU is a crucial component in any international climate change strategy.

John Redwood: If the EU is making such progress, why is it that several EU countries will not meet their Kyoto targets, and why are carbon emissions going up in Britain?

Jim Murphy: The UK is the first and so far the only country to have set binding targets for reducing carbon emissions. We are leading the way in Europe and throughout the world, but carbon emissions can be reduced only through international co-operation. We cannot set up a patriotic front against climate change, as such change does not recognise the national boundaries and borders that the right hon. Gentleman seems to believe in. In fact, I understand that he opposes the binding targets on carbon emissions.

Barry Sheerman: How effective has the UK been, either alone or with our European colleagues, in talking to the Japanese about their disgraceful behaviour in taking whales?

Jim Murphy: We were talking about national borders, and now we have moved on to whales; I assume that we are now talking about the animals and not the Principality. We continue to raise the question of Japan's whaling practices, and its capture and killing of whales. I shall bring my hon. Friend's question to the attention of our colleagues in the Department for Environment, Food and Rural Affairs. That Department leads on the specific question of whaling, as Japan is not likely to be part of Europe in the foreseeable future.

Oliver Heald: How was it that the EU emissions trading system ended up issuing permissions to pollute at 6 per cent. higher than the current level of pollution? What is going to be done about a situation in which Britain set tough targets and ended up having to buy 22 million tonnes of carbon and other similar countries such as Germany and France issued so many permits that they were selling them? What will Lisbon do about that?

Jim Murphy: I hope that the hon. Gentleman does not mind my saying so, but the basic premise of his assertion is absolutely correct. The problem in the past was that there was not enough international co-operation and countries set their own targets in a way that did not fit international priorities or the scale of the problem. Over the next 30 years, if we continue at the current pace, international and world energy demand will increase by a remarkable 50 per cent. That is clearly unsustainable, which is why there is a real need for internationally agreed binding targets of the type that the United Kingdom was first in the world to agree to.

British Council (Russia)

Ben Chapman: If he will make a statement on the future of the British Council's offices in St Petersburg.

Gisela Stuart: If he will make a statement on the operation of the British Council in Russia.

David Miliband: On 12 December the Russian authorities announced that they planned to shut down the British Council offices in St. Petersburg and Yekaterinburg on 1 January 2008. I made it clear in my written ministerial statement of 13 December that the Russian Government's threat against the British Council was illegal. It is therefore the intention of the British Council to remain open and operational in St. Petersburg and Yekaterinburg.

Ben Chapman: While I applaud the Government's decision and recognise of course that it is in times of political difficulty that the British Council's independent and continuing role in bilateral education and cultural links becomes particularly important, is not the key question how we avoid the council's work becoming a pawn in the foreign affairs game and ensure that people on all sides recognise the importance of its continuity?

David Miliband: My hon. Friend makes an important point. The independence of the British Council is asserted on both sides of the House. Certainly it is not a political football from our point of view, and our message to the Russian Government is that they should not use the British Council as a political football. I hope that that can be a united message, because 1.25 million Russians benefited from the activities of the British Council last year, and that must be in both our countries' interests.

Gisela Stuart: Given that it is the British Government's view that the British Council's operations are legal in the Russian context and comply with tax laws, international conventions and the agreement reached with the Russians, and given that the actions of the Russian Government appear to be illegal, what practical help can the British Government give the staff at the offices of the British Council still based in Russia so that they can continue their operation?

David Miliband: My hon. Friend raises an important point. The first thing to say is that, while a threat was issued on 12 December, it has not yet been carried out. Our first priority is to send a clear message to the Russians that this is illegal and there is nothing to be gained by them—in fact, there is everything to be lost, in terms of services for Russian people and of the reputation of Russia around the world—in carrying out this threat. Certainly, my conversations with European and other G8 colleagues suggest that there is unanimous incomprehension at the proposal of the Russian Government to crack down on the British Council. Our duty of care to our staff is obviously something that we take seriously and the offices are in the first instance a matter for British Council management. I assure my hon. Friend that both at official level in Russia and at ministerial level, we take the duty of care to both sets of staff extremely seriously.

Michael Fabricant: The Foreign Secretary may be aware that the news agency TASS, the newspaper  Izvestia and  The Moscow News, the English newspaper, have said that the British Council performs activities not in accordance with what it ought to be doing. They have suggested, for example, that it is an agent of the Secret Intelligence Service and that it interferes in the politics of Russia. The Foreign Secretary will know that that is nonsense. How can he reassure the House and, more important, President Putin, that it is not the case?

David Miliband: The best way, of course, is to agree with the hon. Gentleman. I am sure that my agreement with him will have a profound resonance. We can at least both say that there is absolutely no foundation to those allegations. The legality of the British Council activity seems to me to be clear. It may be worth reading into the record that the British Council's activities are fully compliant with not just international law, but Russian law. Its presence and its activities are specifically endorsed by a 1994 cultural centres agreement signed by Russia. I give him my absolute assurance on the independence and legality of the British Council's work.

Mark Francois: We share the Government's view that Russia's action is wholly unacceptable, so can the Foreign Secretary explain why, although the Prime Minister said at the last EU summit that its conclusions would "reflect" the "anger" that EU leaders felt about the matter, it was not even mentioned by the time that the summit concluded? Do we not now have the worst of all worlds: a Prime Minister who blatantly gave in to European leaders last month, but who managed to offend them into the bargain so that we do not get their help when we request it in turn?

David Miliband: It is frankly pathetic for the hon. Gentleman to try to turn the issue into an anti-European diatribe, when the European Union presidency has issued a statement denouncing any Russian action. I am sorry that he or his researchers have not been able to find— [Interruption.] No, I am sorry; he says that I am wrong, but I will do the research for him; I will send him the European presidency statement, which shows a united European view on the issue. I thought that he confined his Europhobia to issues to do with the European Union, but it seems not.

Chris Bryant: Is not the really worrying thing about the Russian ban on the British Council outside Moscow the fact that it is far from the first time that the Russians have tried to undermine the work of the British Council in Russia, and that it is not the only non-governmental organisation in Russia that has been systematically undermined by its Government in the past few years? Is it not important that we continue to be robust, not least now that Mr. Lugovoi has been elected a member of the Duma? The issue is part of a smokescreen to try to hide the fact that one of his colleagues in the Duma said the other day:
	"The deserved punishment reached the traitor. I am sure his terrible death will be a warning...that in Russia...treason is not to be forgiven. I would recommend to citizen Berezovsky to avoid any food at the commemoration"—

Mr. Speaker: Order. That is far too long.

David Miliband: I am sorry that hon. Members interrupted my hon. Friend—[Hon. Members: "It was Mr. Speaker."] Mr. Speaker is always correct in his interruptions, but Opposition Members are not. My hon. Friend has spent a lot of time on the issue. He is, of course, absolutely right. The shocking quotation that he read out should indeed be denounced. I will just pick up two of the points that he made. First, let us not yet talk about Russian actions. There have been threats, but there have not yet been actions against the British Council outside Moscow, and we should continue to urge the Russian Government not to take any actions. Secondly, we need to continue to give the Russian Government the clear message that we will continue to take the Lugovoi issue seriously; the request for his extradition remains in force, and it remains a commitment of ours to see justice done in this country. At the same time, we are determined to work with Russia on a range of international and bilateral issues. We must continue to make that twin-track message clear.

Human Rights (China)

Norman Baker: What steps he is taking to encourage the Chinese government to adhere to pledges it has made in respect of human rights and press freedom, with particular reference to occupied Tibet.

Meg Munn: We encourage the Chinese Government to fulfil their human rights obligations across China, including in Tibet. My right hon. Friend the Foreign Secretary raised the issue of human rights with the Chinese Foreign Minister in December. My right hon. Friend the Minister for the Olympics and for London raised the issue of media freedom in November. We will raise our concerns on Tibet at the next round of the UK-China human rights dialogue in Beijing later this month.

Norman Baker: The Chinese have promised media freedom for foreign journalists in China, but have restricted it even more in occupied Tibet. They promised to give the Red Cross access to prisons in China, but exempted Tibet. They promised religious freedom, but effectively have martial law in monasteries. Is not the reality that the Chinese sign lots of bits of paper about Tibet, but do absolutely nothing about it?

Meg Munn: We take seriously the range of human rights issues that the hon. Gentleman raised. I know that he has a long record in relation to Tibet and has rightly highlighted the matter on many occasions. We pursue human rights in three ways—through high-level lobbying, through UK-China and EU-China dialogues, and through project work on the ground, including on issues such as the judiciary, torture, the death penalty and minority rights.

James McGovern: It is heartening that China has made pledges to uphold human rights. However, it is difficult to equate such pledges with China's continuing offer of no-strings aid, which has emboldened some unsavoury Governments and allowed them to ignore calls for reform. Can the Minister assure the House that the Government will continue to do all in their power to encourage China to conditionalise the aid that it gives to some of the most despotic regimes in the world, such as the regime in Sudan?

Meg Munn: My hon. Friend raises an important point. Our engagement with China always focuses on human rights issues. The Prime Minister is to visit shortly and will continue our dialogue and continue to press on these matters.

Malcolm Rifkind: What is the difference between the Chinese Government's respect for human rights in Tibet and the Serbian Government's respect for human rights in Kosovo that justifies a very different policy by Her Majesty's Government?

Meg Munn: We take seriously the issues in Tibet and we raise these matters continually at the regular dialogues. This will be the 16th round of dialogues between the UK and China on Tibet, and on this occasion the delegations will make a visit to Tibet to study the situation on the ground.

Women's Rights (Basra)

Evan Harris: What assessment he has made of the safety of women in Basra province who do not adhere to Islamic dress and behaviour codes.

Kim Howells: The Government condemn all violence against women and are committed to supporting women's rights in Iraq. We have heard accounts of extremist militias murdering women who allegedly have not conformed to the dress codes that their killers consider appropriate for females. We are supporting groups and individuals working to improve the situation of women in Basra. These include many committed and courageous female professionals and politicians. We support the Basra chief of police's personal pledge to improve security for women in the city.

Evan Harris: I thank the Minister for that thoughtful response. Can he assure us that the Government in Basra province are as committed as the House believes they should be to equal rights for all citizens and to protecting some of the most vulnerable from action by militias or by the police or state authorities? Does he share my concern that we may have left in Iraq a situation where dressing un-Islamically, or comitting apostasy or blasphemy, are punishable physically, and that in that respect the situation is worse than when we went to war there?

Kim Howells: I raised the matter this morning with General Mohan, who is the head of the operations centre in Basra. He reminded me that Basra had once been the most cosmopolitan of cities in the Gulf, and he was confident that it could be returned to that position. He made it clear to me that he was worried about some of the activities of what he called Iranian agents in stirring up feeling there in favour of a much more rigorous application of the more austere aspects of some Islamist sects. The hon. Gentleman is right. We must keep a close eye on the situation and keep reminding the Government in Baghdad that they must do everything possible to protect women in that city and in every other city in Iraq.

Ann Cryer: Will my hon. Friend comment on the historic background to the sort of treatment that we are hearing about in Basra province? Does it go back to the period of Saddam Hussein or beyond that? Does he agree that the Koranic advice on Islamic dress is simply that men and women should dress modestly—that is, they should be careful and not expose too much of their body? However, it says nothing about the burqa or the niqab.

Kim Howells: It is important that we remember that in the last years of Saddam Hussein's rule, he had six women murdered in Basra. Their bodies lay in the main street for six days and no one was allowed to touch them because he wanted to teach Basrawis a lesson about the way that they behaved in public. It was a brutal regime and it has been a brutal history. My hon. Friend, who knows a great deal about the subject, is right about dress codes. One has only to visit the middle east to witness how differently dress codes are interpreted across the region. It is a mystery to those of us who go there and ask, "If the dress code is interpreted in that way in one country, why should it be so strictly interpreted in another?" I hope that our dialogue with countries in the middle east will help them understand the concern that we feel at the fact that human beings are treated in that way as a consequence of their mode of dress.

David Lidington: The Minister will have seen today's comments by Sir Hilary Synnott, the former head of the British administration in southern Iraq. Sir Hilary said that the problems there are due, at least in large part, to the fact that the efforts of our troops were let down by a failure to co-ordinate and deliver effective civilian work on reconstruction. Can the Minister assure us now that the Government have learned and are acting on that lesson from Basra, before we repeat the experience that has occurred in Afghanistan?

Kim Howells: I was surprised to read Sir Hilary's statement, because in fact there have been some very substantial achievements in and around Basra; one has only to think, for example, of some of the projects run by the Army down there. There are huge new date plantations, employing 4,000 people. When our rebuilding of parts of the electricity and water infrastructure finishes very soon, there will be additional electricity and drinking water for the first time for 1 million people.
	There have been achievements. However, the hon. Gentleman is right to raise the issue of the lack of preparedness after the invasion in respect of understanding what was required in rebuilding the country and offering people services that made their lives different from how they had been during the days of Saddam Hussein.

Patricia Hewitt: My hon. Friend will recall that immediately after the fall of Saddam Hussein, the British Government took steps to ensure that Iraqi women from all the different communities in Iraq were able to come together and have a strong voice in the shaping of the new constitution and the election of the new Parliament. Can he assure me that the Government will continue to support a strong voice for Iraqi women—both directly, through the efforts of his Department, and indirectly, through the work of the Muslim Women's Network, organised by the Women's National Commission?

Kim Howells: Yes, indeed; my right hon. Friend is right to remind us of that. It is difficult to see how Iraq can move forward if the rights of women are not enhanced and protected. However, I am confident that they will be. Besides anything else, there are now some powerful and vocal female members of the Iraqi Parliament—they will make a difference, if no one else will.

Western Balkans

Anthony Steen: What recent steps have been taken by the Drugs and International Crime Department in co-operation with the border authorities of states of the western Balkans to reduce illegal immigration and trafficking of people.

Kim Howells: Through its Drugs and International Crime Department, the Foreign and Commonwealth Office contributed about £1.5 million in 2005 to 2007 for capacity building of law enforcement in the Balkans, including awareness-raising projects aimed at potential victims in Romania and Bulgaria. We have helped fund three projects in Serbia, three in Albania, two in Macedonia and one in Bosnia. I have met the Interior Ministers of Romania, Bulgaria and Albania to discuss how best to tackle crimes such as illegal immigration, drugs and human trafficking through those countries.

Anthony Steen: As one of the principal objectives of the Drugs and International Crime Department is the dismantling of trafficking groups, and as British taxpayers paid tens of millions of pounds for that department, will the Minister say how many trafficking groups have been dismantled in the western Balkans in each of the past five years? How much money has been taken from the traffickers and put into the British taxpayers' purse and how much money has been given to the victims of trafficking in the western Balkans as a result of the dismantling of such groups? Has any of the money—

Mr. Speaker: Order. The hon. Gentleman is pushing his luck.

Kim Howells: I will certainly try to supply the hon. Gentleman with the figures that he asks for. I commend the work that he has done and recognise that in forming an all-party group in this House he has drawn attention to an extremely serious crime. He understands, and I hope that he will keep telling people, that trying to break up those routes and those gangs is very difficult and becoming more difficult, because they are often financed by additional smuggling of drugs, whether Afghan-based heroin or the cocaine that is increasingly coming through that route into western Europe. It is a big job. There are people doing some very brave things in the western Balkans in trying to break up those gangs. I will try to get the figures that the hon. Gentleman asked for, because I do not know them offhand.

Crispin Blunt: The Council of Europe convention on human trafficking comes into force next month, yet we are still to ratify it. The Government say that some legislative changes are required. Will they tell us what those changes are, and publish a timetable for them so that we can get on and help the victims of trafficking?

Kim Howells: The hon. Gentleman is right to attract our attention to this. Implementing the convention is a key part of the comprehensive United Kingdom action plan on tackling human trafficking. Some of the other signatories to the convention have legal systems that allow or require ratification before implementation; ours does not. We intend to implement the measures, in effect, before formal ratification. As the hon. Gentleman hinted, the complexity of some of the issues to be resolved, including the likelihood of secondary and primary legislation and the need fully to consult stakeholders, means that ratification will take time. We want to ratify as soon as possible, but we believe that getting the arrangements right so that they work on the ground is much more important than political posturing.

South Africa

Sally Keeble: What assessment he has made of recent political developments in South Africa.

Meg Munn: Recent events in South Africa show that the country continues to develop and strengthen its democracy. South Africa is, and will remain, an important partner for the United Kingdom on a range of key bilateral, regional and wider international issues.

Sally Keeble: What assessment has my hon. Friend or her Department made of the impact of the change of leadership of the African National Congress on the Government in South Africa? Is she concerned that our strategic allies face political uncertainties, or pressures, not only in southern Africa but more spectacularly in east Africa?

Meg Munn: My hon. Friend raises an issue concerning internal matters in the African National Congress. As far as the United Kingdom Government are concerned, South Africa is a key partner. President Mbeki is due to remain in office until the next South African elections, and we will continue to work closely with him and his team throughout this period.

Gregory Campbell: Given the continuing catastrophe in Zimbabwe, what pressure are Her Majesty's Government bringing to bear, through the South African Government, to bring to an end the totally unacceptable activity that continues in Zimbabwe?

Meg Munn: The UK Government consider the role of South Africa to be very important in seeking to address issues in Zimbabwe, and we believe that regional action is likely to be the most effective. We continue to back President Mbeki's mediation role through the South African Development Community initiative. Deadlines have been missed, which is unfortunate, but we are told that negotiations are entering their final stages, and we will continue to talk to South Africa about this.

Nicholas Winterton: Following up the question from my hon. Friend the Member for East Londonderry (Mr. Campbell), what recent political developments give the Minister confidence that Thabo Mbeki and the South African Government will put increased pressure on Mugabe to return Zimbabwe to democracy, and perhaps also suggest that the elections for the presidency a little later this year should be monitored and supervised internationally?

Meg Munn: As I said, we have been told that the final stages of negotiations under the SADC initiative are under way, but I am afraid that there are no new signs of optimism in relation to the process. The hon. Gentleman is right to raise the issue of elections; we would want those elections to be moderated and supervised internationally.

Colombia

Kelvin Hopkins: What assessment he has made of the observance of human rights by the Government of Colombia.

Kim Howells: The Colombian Government have stated many times their commitment to improving human rights, and progress is being made. However, as I discovered on my visit a few weeks ago, too many Colombians live in fear of violence, murder and kidnapping. Illegal armed groups are mainly responsible, but reports of soldiers and policemen committing abuses are a continuing concern. That is why we are helping the Government of Colombia, and civil society, to protect and promote the rights of all Colombians, which is a priority for this Government.

Kelvin Hopkins: I thank my hon. Friend for his answer. According to Amnesty International, Colombia is one of the most dangerous places in the world for trade unionists to live and work. More than 2,200 were killed between 1991 and 2006, and security forces and Government-backed paramilitaries were thought to be behind many of those deaths. Will my hon. Friend consider withdrawing support for the Colombian security services until they give absolute guarantees that the rights of trade unionists will be protected and observed?

Kim Howells: No, we will not withdraw our support, because we are trying to convince people in Colombia that human rights are an important consideration. We are working with the authorities and non-governmental organisations there, and we are certainly working with the Colombian TUC. In fact, I met the president of the Colombian TUC on my visit just before Christmas, and he was convinced that the work we are doing is very valuable. We will continue to take part in efforts to ensure that Colombian trade unionists are given the protection that they deserve. They have been kidnapped and killed by all manner of groups, including FARC, which sometimes considers them to be getting in the way of good drug business in the south of the country. FARC kills trade unionists, just as right-wing militias would.

John Bercow: In addition to suffering quite the most savage and egregious violence of the sort to which the hon. Member for Luton, North (Kelvin Hopkins) referred, the Minister of State will also be aware that substantial numbers of Colombian trade unionists have been imprisoned—in some cases for very lengthy periods—without being charged with any offence, and therefore without the opportunity to defend themselves in a proper trial. I feel sure that the Minister of State has remonstrated in the strongest terms; perhaps he can give the House details of how he has done so.

Kim Howells: Yes indeed. During my last visit, I raised that matter with Vice-President Santos and the Defence Minister. It is not a great advert for any democracy—and I believe that Colombia is a fast-developing democracy, and a good example to Latin America. Everyone must be given a fair trial there, especially trade unionists, who have been very brave in standing up for the rights of ordinary people in some of the most dangerous areas in the world.

Tom Clarke: Is my hon. Friend aware that some of us who visited Colombia a couple of years ago would very much endorse what he and other hon. Members have said about the role of the trade union movement? Those involved were some of the bravest people we met. Will he therefore continue the dialogue with the international trade union movement? Will he remember, too, that some of the Churches were hugely influential in carrying out marvellous work, and that they too should be encouraged?

Kim Howells: Yes indeed; that is an important point. Such things will help Colombia to be part of a wider international dialogue. There is some very good work going on there, and my right hon. Friend mentioned some of the agencies involved. There are many others too, involved with small activities that people are undertaking. Let us also remember that five or six years ago the country was on the verge of being a failed state, run by gangsters. The biggest cartel of gangsters today is made up of those posing as revolutionaries—FARC. It is the biggest drug cartel in South America, and certainly in the western world. It will use any form of repression, such as torture or kidnapping, and it will hold people for a very long time in order to further its own commercial ends.

Council of Ministers

Charles Walker: If he will make a statement on the agenda of the Slovenian presidency of the Council of Ministers.

Jim Murphy: Slovenia took on the European Union presidency on 1 January, and we congratulate it on being the first of the 2004 new member states to do so. We welcome its strong focus on the Lisbon jobs and growth agenda, economic reform, climate change and further EU enlargement.

Charles Walker: I, too, welcome the presidency of Slovenia, one of the EU's smallest nations. What measures will we, as a sovereign Government, take to ensure that Slovenia does not fall under the undue influence of our friends across the channel, such as France? What will the Government do to protect our national interests during this important period?

Jim Murphy: It is difficult to answer such an unusual question, which is bizarre and absurd in equal measure. Slovenia is a proud and newly independent member state, which has an ambitious agenda for the rotating presidency. Let me stumble towards an answer to the hon. Gentleman's question: we are providing logistical support and secondees to the Slovenian Government, and I visited Ljubljana recently. It is vital for the Slovenian presidency to be a success. Together, we have celebrated the independence of the nations that were freed from the tyranny of communism and are now proud members of an alliance of democracies.

Stuart Bell: When you called me, Mr. Speaker, I almost said, "Merci".
	May I confirm that the first thing that the Slovenian Parliament will do is ratify the Lisbon treaty, in accordance with the Slovenian presidency? Will not the hon. Member for Broxbourne (Mr. Walker) be happy when our Parliament, too, ratifies the Lisbon treaty?

Jim Murphy: My hon. Friend is right. We will take a similar approach to the treaty to that which previous Governments took to other European treaties, including Amsterdam, Nice, Maastricht and the Single European Act. We have an established constitutional principle in the United Kingdom: the Palace of Westminster—the House of Commons and the House of Lords—gives its agreement to such European treaties.

Topical Questions

Kevin Barron: If he will make a statement on his departmental responsibilities.

David Miliband: I briefed the House yesterday on the situation in Pakistan and Kenya and the steps that the Government are taking to help those countries on the path to democracy and development. I can confirm that President Kufuor of Ghana is on his way to Nairobi, and we will do all that we can to assist him.
	In 2008, the Foreign Office will focus its policy work on four matters: countering terrorism and weapons proliferation; promoting a low carbon, high growth global economy; preventing and resolving conflict; and developing effective international institutions—most critically, the United Nations and the European Union.
	With your permission, Mr. Speaker, I should also like to mention two events in Lebanon earlier today. I am sure that the House will want to condemn strongly the rocket attacks overnight from southern Lebanon on Israel. Secondly, I can confirm reports of an explosion in Rmeileh, 30 km south of Beirut, in which two UN peacekeepers have been injured but, fortunately, not killed. We are seeking more details, but I am sure that the House will join me in deploring any attacks on UN peacekeepers.

Kevin Barron: In my right hon. Friend's statement on Pakistan yesterday, he said that it was crucial that the delayed elections be seen to be free and fair. He also said that, if invited, the Commonwealth could play a positive role in monitoring such elections. Has such an invitation been extended at this stage? What actions are the Government taking to ensure that the Commonwealth is prepared if such an invitation comes along?

David Miliband: My right hon. Friend raises an important point. I have spoken to the Commonwealth secretary-general, who confirmed that approaches have been made to the Pakistan Government to make it clear that the Commonwealth would like to have monitors there. I spoke to Pakistan's acting Foreign Minister last Friday to re-emphasise our belief that Commonwealth monitors could play a constructive role in not only Pakistan's election but its eventual re-entry to the Commonwealth.

William Hague: Across the House, we are united in deploring the rocket attacks against Israel and any attacks on UN peacekeepers, as the Foreign Secretary said, and also in intensifying the pressure on Iran to suspend its nuclear enrichment programme and return to negotiations. The Foreign Secretary gave a welcome assurance in November that he had agreed with the other members of the Security Council that a new UN resolution, imposing sanctions on Iran, would quickly be introduced unless Javier Solana reported a positive outcome to his discussions. Mr. Solana reported no such positive outcome, yet no UN resolution has been agreed so far as we know. Will the Foreign Secretary assure the House that it is postponed rather than abandoned?

David Miliband: Yes, although I would not want to use the word "postponed", or associate myself with it at all. The six members of the E3 plus 3 made it clear that if there were no positive outcome from the work of Javier Solana and the work of the International Atomic Energy Agency, which is pursuing important issues relating to previous Iranian activities in respect of uranium enrichment, there would be a new Security Council resolution. I can confirm to the right hon. Gentleman that intensive work is going on among all six Governments, designed to take forward a resolution on a unanimous basis. I can also say that yesterday I met the secretary-general of the IAEA, Dr. el-Baradei, and emphasised the importance of his work and the urgency of taking it forward in respect of critical issues to do with contamination that remain to be answered by the Government of Iran.

William Hague: The Foreign Secretary also assured us in November that the Government would press for further EU sanctions against Iran, to be agreed before the end of the year—that is, before the end of 2007. The Minister for the Middle East told the House in October that the Government were "very confident" that EU sanctions against Iran would be tightened. We welcomed that, but again, no such additional action has yet been taken. Is it not vital that it is taken, if Iran is not to conclude that the world does not have the will to uphold the non-proliferation treaty?

David Miliband: It is vital that that action is taken forward. The right hon. Gentleman will know that, in an unprecedented statement, European leaders at the European Council in December agreed the text of a very strong statement in respect of this issue, which made clear the readiness of the EU to move forward. Obviously the EU track and the UN track are complementary, but I assure him that there are intensive discussions taking place on an EU basis, as well as on the UN track.

Nigel Griffiths: Will the Foreign Secretary report to the House on what has happened in Basra since our forces handed over provincial control in December?

David Miliband: My hon. Friend raises an important and timely point, given the visit to London today of General Mohan, the commander of Iraqi security forces in Basra. I met General Mohan this morning, as did my hon. Friend the Minister for the Middle East, and the Secretary of State for Defence is meeting him this afternoon. General Mohan told me that although the security situation of course remains difficult—some of that was discussed earlier this afternoon—he is confident that Iraqi security forces have the capacity to take their work forward. I very much hope that the unity that he called for—on security issues, economic reconstruction and political reconciliation—can bring unity across the House on how we move forward on the issue of Iraq, even though I understand that there will never be unity on the original decision five years ago.

Andrew MacKay: As last July the Prime Minister rightly described the Darfur crisis as one of the great humanitarian disasters of our generation, and as the joint African Union and United Nations force was supposed to be 19,000 strong on 31 December—that is, last week—but is only 9,000 strong on the ground, and comprises mainly African Union troops, what are the Government doing to put the matter right?

David Miliband: The right hon. Gentleman has long made important contributions on this issue, and he is right to highlight the discrepancy between the agreed intended size of the AU-UN force and its current size. I spoke to the UN Secretary-General over the Christmas and new year break, because of the difficulties in Pakistan, and was able to register the importance of the issue. The mission in New York is also taking it forward. I hope that the right hon. Gentleman will also agree that, in parallel to the work to ensure that the force, with the right equipment, is on the ground in Darfur, we must pursue the work to bolster the comprehensive peace agreement, which has brought three years of peace between north and south, but needs to be taken forward further. I hope that the political track, as well as the military track, can be taken forward in 2008.

Si�n Simon: Assuming that the Minister can give us no further information about the worrying rocket attacks from southern Lebanon into Israel overnight, can he say what he thinks might be the impact of President Bush's visit tomorrowhis first in all these years as US President?

Kim Howells: I hope that my hon. Friend will accept that these rocket attacks are very worrying. Two rockets came from Lebanon into Israel. We do not know who fired them: we suspect that elements of Fatah al-Islam, the group that caused the devastation in the refugee camp in the north of Tripoli, may be involved, but we have had no confirmation of that. My hon. Friend asks what difference the visit will make. I very much hope that it will continue to focus the attention of the world on the need for far more work to be put in on the middle east peace process, which has been a desultory process for far too long. The intensity that we witnessed in the run-up to Annapolis and since is to be welcomed. With luck, and particularly with the energy of the Americans, we hope to start to see some real achievements.

Edward Davey: Further to his answer to the right hon. Member for Bracknell (Mr. Mackay), is the Foreign Secretary aware that the UN Secretary-General Ban Ki-moon warned yesterday that UNAMID still does not have enough helicopters to carry out its peace-keeping mission in Darfur? While I recognise that our own armed forces are in need of more helicopters, particularly in Afghanistan, what is the British Government doing to ensure that UNAMID has the 24 helicopters that it was promised? The people of Darfur have waited long enough. When will the Government, with our EU and NATO allies, provide those life-saving helicopters?

David Miliband: I again welcome the hon. Gentleman to his post, and to his first Foreign Affairs questions. He rightly raises a detailed point about helicopters. Of course, the pressure on helicopter numbers is reflected not just in Afghanistan but in Chad, where an important French drive is taking place. The hon. Gentleman asked how we were taking discussions about this forward, and I can assure him that in NATO, in the EU and at the UN, strong diplomatic representations are being made at the political and official level. He referred to the calls already being made on British forces, and he will know that although it is easy to talk about deploying one or two helicopters, to do that requires significant numbers of staff in support. It is a complex matter, but I strongly share the hon. Gentleman's sense of urgency about the situation, and I acknowledge the need to ensure that countries with forces at their disposal send them to the areas where they are most needed.

Ronnie Campbell: What further assessment has my right hon. Friend made of the Bali agreement, particularly of aspects that would benefit the people of the UK?

David Miliband: My hon. Friend raises an important point. This is the first time that the House has had a chance to discuss the matter since the very important Bali conference, where my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and the Minister for the Environment played a critical role in the last hours of the negotiations in securing an agreement. It is not a final global deal on climate change, but it includes for the first time commitments for all countries to be engaged in emissions reduction. Secondly, it specifies 25 per cent. to 40 per cent. cuts in emissions by the developed nations that were signatories to Kyoto by 2020. I think that that provides a basis for serious negotiations over the next two years. Perhaps the greatest thing achieved in Bali was the setting of a deadline for those negotiations, of December 2009the last date by which we need an agreement if there is not to be a gap when the current Kyoto commitments lapse in 2012.

Simon Hughes: Ministers will know that since 1 January this year, Sri Lanka has seen the death of one member of parliament, the death of a military commander of the Tamil Tigers and of other Tamils, and, in the last 24 hours, the death of the Minister responsible for nation building. Given that the Sri Lanka Government have announced that they will terminate the ceasefire agreement next Wednesday, what are Her Majesty's Government doing to try to bring both sides together again to facilitate a long-term and secure settlement for Sri Lanka so that all its peoples can live in peace?

Kim Howells: I share the hon. Gentleman's concern about the deteriorating situation in Sri Lanka. We have been trying for a long time to help the Norwegians, who have been attempting to broker peace and have done sterling work there. Indeed, my right hon. Friend the Member for Torfaen (Mr. Murphy), a former Secretary of State for Northern Ireland, has been out to Sri Lanka to try to build bridges between the communities on the basis of his experience of what happened in Northern Irelandbut it is a very difficult process. I think that the most distressing feature is how the Government have won some military battles, but then become less enthusiastic about reconciliation and involving everyone who lives on that troubled island in a more inclusive way. We will continue to work with the Government, however, to emphasise that reconciliation must take place. There must be talks; otherwise the killing will continue. A Minister died yesterday, and we have seen

Mr. Speaker: Order. I must stop the Minister there.

Philip Hollobone: Does the Foreign Secretary believe that it would benefit the international community if the Republic of Ireland became a member of the Commonwealth, and are Her Majesty's Government involved in any co-ordinated efforts within the Commonwealth to extend an invitation to the Republic so to do?

Jim Murphy: There is a series of important reforms of the operation of the Commonwealth, which Her Majesty's Government strongly supportbut it is largely for other countries to seek membership. It is not for the United Kingdom to extend invitations to other countries at our behest or suggestion. It would be for Ireland to initiate such an application, and it has not done so, nor does it appear to wish to submit such an application, now or at any point in the near future.

Kelvin Hopkins: Will my right hon. Friend seek meetings with Senator Barack Obama to discuss how he might lead America to a more peaceful world, in contrast to the present incumbent of the Oval Office?

David Miliband: We will seek meetings with all presidential candidates from the United States, to help lead America to move forward in a productive fashion.

Andrew Robathan: I am sure the Foreign Secretary agrees that trust plays a vital part in any discussions that he has with other Foreign Ministers, but in 2005 he, and indeed all Labour Members, stood for election on a manifesto commitment relating to the constitutional treaty which stated:
	We will put it to the British people in a referendum.
	Given that all other Foreign Ministers in the European Union consider the new EU treaty to be a constitution in all but name, how can they ever have any faith in anything that the Foreign Secretary saysor were he and the Prime Minister deliberately misleading the British people?

David Miliband: Twenty-six of the 27 leaders of the European Union clearly do not believe that the treaty is the same as a constitution, because they do not propose to hold a referendum.

Andrew Robathan: They've said it!

David Miliband: Despite what the hon. Gentleman says, only Ireland, which is required constitutionally to hold a referendum, is going to do soand what the 27 have actually said is that the constitutional treaty has been abandoned. That is the truth of what they have said.

Ann McKechin: Last month the Secretary of State for International Development said that the humanitarian crisis in Gaza was
	getting worse by the day.
	Essential medicines have run out, fuel supplies have been cut, and supplies of clean water have been severely restricted. When will the United Kingdom Government remind the Israeli Government that that form of collective punishment is a clear breach of the Geneva convention, and insist that they live up to their duties with regard to humanitarian care?

David Miliband: My hon. Friend has raised an important point. I assure her that we cover the issue of Gaza in all conversations with the Israeli Government. Since the declaration of Gaza as a hostile territory on 30 October we have continued to raise the humanitarian situation there, most recently at the NATO Foreign Ministers' joint meeting with middle eastern countries. As my hon. Friend will know, on 4 January there was a further tightening of the situation. It remains critical and deserves the attention of the Government, and I assure my hon. Friend that it is receiving it.

Umbilical Cord Blood (Donation)

David Burrowes: I beg to move,
	That leave be given to bring in a Bill to promote the donation of cord blood from women after giving birth; and for connected purposes.
	Given that I have six children, I should be declaring an interest in the subject of the Bill. My constituency is adjacent to Barnet general hospital, one of only four NHS hospitals that collect umbilical cord blood. That would seem to be a good reason for developing an interest, but we have not donated umbilical cord blood despite six opportunities to do so at a nearby hospital. Like most parents throughout the United Kingdom, we were not informed of the value of cord blood or the possibility of collection. Until recently I did not consider the umbilical cord, once clamped after birth, as anything more than a waste product. The first purpose of the Bill, and of my speech, is to encourage parents and the wider public to be more informed about the value and benefits of umbilical cord blood.
	Hon. Members may be ignorant, as I was, of the nature of cord blood. The baby's blood in the cord contains different types of cell, including stem cells. Cord blood has been used for the last 20 years for blood transplantation. It has treated patients with leukaemia, sickle-cell diseases, immune deficiencies and other diseases: there have been 85 treatments to date.
	There are possible treatments in the pipeline beyond blood therapy. Trials for the use of cord blood in brain injury in children are under way and cord blood is being developed for many other therapies, including diabetes and liver therapy. Treatment for leukaemia highlights the particular value of cord blood transplants, which can be used as an alternative to bone marrow transplants. Such cord blood transplants are less complicated, with fewer delays, and more readily available, as they can be stored and frozen for many years. Significantly, it is easier to find a match from stem cells than from bone marrow.
	Umbilical cord blood collection leads to increased access to transplantation, particularly for patients from ethnic minorities. The reality is that umbilical cord blood, which is thrown away routinely after birth, has a life-saving value. Becki Josiah contacted me after her daughter Billie died from leukaemia in April 2006. She was ill for two years and awaiting a bone marrow transplant. A major difficulty for the Josiah family was their daughter's mixed-race background. As Mrs. Josiah said to me,
	Mixed-race individuals have a much lower chance of receiving a match in bone marrow donations and cord blood donation gives them another vital chance at a cure.
	The Bill attempts to increase the chances of a cure for families such as the Josiah's.
	Mrs. Josiah has also highlighted the limitations on donation. She recently had another baby and wanted to donate her newborn baby's cord blood to help cure a child with leukaemia, like her daughter. However, her family does not live near one of the four NHS hospitals with facilities to accept her donation. As she said, it was not possible for her blood to
	go to another family to help spare them the agony of losing someone they love.
	Successful treatment is possible for one's own blood, a sibling's or that of an unrelated patient. We must find a way of enabling more patients to access this source of treatment, and my Bill takes some steps in that direction.
	My interest in umbilical cord blood arose when as a member of the Joint Committee I scrutinised the draft Human Tissue and Embryos Bill. Our remit was focused on the Government's approach, which is to ensure that the UK is at the forefront of scientific development in embryonic stem cell research. A majority of public money supports embryonic research compared with other stem cell sources. The House will no doubt have the opportunity soon, with the Human Fertilisation and Embryology Bill, to debate whether it is wise to move into the realms of interspecies research to deal with the limited number of embryonic stem cell lines.
	As well as the political hurdles, there are ethical and biological hurdles in the way of the Government marching us up to the top of the hill of embryonic research. It is therefore timely to consider an alternative hill of stem cell research. The terrain is the same: wanting the UK to be at the forefront of bringing stem cell therapies and regenerative medicine to the clinic in order to relieve suffering and reduce health care costs. With the help of this Bill, the focus would be on core blood stem cell therapy, which already results in treatment of diseases. Research in the field holds out an exciting future; notably Professor Colin McGuckin has led a team in Newcastle to be the first in the world to characterise human embryonic stem cells from umbilical cord blood.
	The question that the Bill raises is why only 150 cord blood transplants out of 8,000 worldwide have been carried out in the UK. Why are we routinely disregarding the proven life-saving value of umbilical cord blood but legislating and investing predominantly in the unproven and ethically challenging route of embryonic research? Given that we will in the foreseeable future depend on non-embryonic stem cell therapies, why are we putting literally most of our eggs in one basket?
	There are supporters of the Bill who are not necessarily opposed to embryo research but recognise the value of umbilical cord blood and its availability. The Bill would make it a universal requirement for doctors to inform pregnant women of the benefits of collection and storage of cord blood. The Royal College of Obstetricians and Gynaecologists advises that if there is a known genetic condition in a familyalready a child with leukaemia or a blood-related disordera clinician may recommend that parents bank their babies' cord blood. My Bill would presume that collection takes place in such circumstances unless parents opt out or medical reasons prevent it. If nothing is done in this area, some private banks will simply exploit families' fears.
	The practical problem facing any future extension of donation of cord blood is the limited number of NHS maternity units equipped for collection and storage in a safe environment. The NHS cord blood bank at Edgware restricts its collections to Barnet general, Northwick Park, Luton and Dunstable and Watford hospitals, which are the only dedicated units in England. The collection sites do not form a planned approach to collection of cord blood and we are currently missingor, more to the point, wastingthe opportunity presented by umbilical cord blood.
	The Bill seeks to promote the collection of cord blood from specific shortage groups, particularly ethnic minority groups and mixed-race families. The UK Thalassaemia Society, which has its base in Southgate in my constituency, recognises that point in its support of my Bill, as does the Leukaemia Society in the United Kingdom. They have emphasised to me the difficulties for leukaemia patients of Cypriot origin in finding appropriate bone marrow matches and support the proposed extension of cord blood donation.
	The purposes of the Bill are not wholly dependent on legislation. The Anthony Nolan Trust, which also supports the Bill's aim to promote the benefits of cord blood collection, is setting up the first charitable cord blood bank in the UK and plans to promote opportunities for more cord donation. The hope is that six maternity units will facilitate collection. The aim is to harvest 12,500 cords within five years for clinical and research use.
	The Bill seeks to raise our sights higher, given the value now of cord blood's treating 85 different diseases. It also seeks to rebalance the debate on stem cell therapy, which can often be more led by media proxy and hype than the ability realistically to treat patients. The Bill supports an ethical and convenient alternative to embryonic sources of stem cells. It also supports parents who are waiting desperately for treatment for their children with diseases such as leukaemia.
	I leave the last words to Becki Josiah. She says:
	I find it obscene that I could go into Selfridges tomorrow and buy a jar of face cream containing placenta but I cannot find anyone willing to collect and store the precious resource that is cord blood,
	and asks whether anything can be done to help her.
	I commend the Bill to the House.
	 Question put and agreed to.
	Bill ordered to be brought in by Mr. David Burrowes, Geraldine Smith, Simon Hughes, Robert Key, Mr. Julian Brazier, Mr. Stephen Crabb, Mr. Andrew Dismore, Bob Spink, Michael Fabricant, Jim Dobbin, Andrew Selous and Mrs. Nadine Dorries.

Umbilical Cord Blood (Donation)

Mr. David Burrowes accordingly presented a Bill to promote the donation of cord blood from women after giving birth; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 17 October, and to be printed [Bill 50].

Opposition Day
	  
	[5th allotted day]

Network Rail

Mr. Speaker: We come now to the first debate on the Opposition motions. I inform the House that I have selected the amendment in the name of the Prime Minister.

Theresa Villiers: I beg to move,
	That this House is deeply concerned by the track work over-runs by Network Rail on the West Coast Main Line and at Liverpool Street station over the Christmas and New Year period; believes that the disruption caused to passengers was unacceptable and that Network Rail failed to plan properly for the successful completion of works on time; further notes that Network Rail was created by the present Government and believes that these recent incidents illustrate that the organisation is insufficiently accountable to its customers; and calls on the Government to take steps to ensure that Network Rail is made more accountable to the travelling public so that efficiency is improved and a much better quality of service is provided to passengers in the future.
	As if non-stop gloomy economic news and the return to work after the Christmas break were not enough to depress people last week, thousands of travellers had rail chaos to contend with as well: a truly miserable new year greeting from this Government and Network Rail, the organisation that Labour created to maintain and run the tracks on our railwaysa creation process in which the Prime Minister and his closest Treasury advisers were heavily involved. A key national route60,000 passengers a day use the extensive stretches of the west coast main linewas seriously disrupted when upgrade works around Rugby ran four days over time. Many people were forced on to lengthy bus journeys and were subject to hours of delay.
	Liverpool Street station, which is used daily by 100,000 passengers, was completely closed on the first working day after the new year, when a bridge project overran, and services remained disrupted for another two days. That level of disruption damages our economic competitiveness, and causes misery for passengers and inconvenience for those who are running freight on our railways. It is simply not acceptable, it should not have happened and it need not have happened had there been sensible planning. The fact that it occurred on a day when fares increased by as much as 14.5 per cent. in some areas compounded the anger and dissatisfaction felt by so many passengers, who rightly believed that they were not getting value for money.

Brian H Donohoe: The hon. Lady may not have been in the House when Robert Adley, the ex-Member for Christchurch, commented that the privatisation of the railway network was like the poll tax on wheels. Many Transport Select Committee reports have made it clear that everything we are facing is down to fragmentation. In these circumstances, why are the Opposition suggesting that the answer to the problems over the Christmas period, which affected people north of the border who were travelling through Rugby as well as those south of the border, is further fragmentation? Why is the hon. Lady advocating that?

Theresa Villiers: Where I agree with the hon. Gentleman is on his statement that the disruptions impacted negatively on people north of the border as well as on those south of itthe Opposition are deeply concerned about that. On the rest of his contribution, I must tell him that this Government have to start answering for their own record on the railway network.

Katy Clark: rose

Theresa Villiers: They have been in charge of our rail network for the past 10 years, so I would welcome an explanation from the hon. Lady.

Katy Clark: Does the hon. Lady accept that there has been a huge improvement in service since Labour took power? Indeed, since the creation of Network Rail there has been a 28 per cent. decrease in delays.

Theresa Villiers: It is certainly true that some progress in the rail industry has been made, a significant amount of which results from privatisation. It would not have been possible to achieve that progress without the enterprise introduced by the private sector train operating companies.

Andrew Miller: As a regular traveller on the west coast main line, I am particularly interested in the project to which the hon. Lady refers. Will she put this debate into perspective by telling us the scale of the project that was undertaken during this winter break? How many person hours were put in to the work that she is challenging?

Theresa Villiers: It was clearly a huge project, but there is no excuse for the disruption that caused misery to so many people.
	Labour created Network Rail and Labour must carry the can for its failure. To all intents and purposes, it is a nationalised industrymore or less everyone accepts that, except the Government and the management of Network Rail. No matter how many somersaults they do to try to keep Network Rail's debts off the Government balance sheets, they are simply in denial if they think that Network Rail is not effectively an agency of government. May I draw the House's attention to something said by the former Leader of the House, the right hon. Member for Blackburn (Mr. Straw)? He explicitly referred to the fact that the Government
	brought Network Rail into public ownership.[ Official Report, 1 February 2007; Vol. 456, c. 363.]

Bob Russell: I am a regular user of the railway from Colchester to London Liverpool Street, and I have a lot of sympathy with the points that the hon. Lady is making because I have constituents who were similarly affected. Does she accept that the fragmentation of the railway industry has not helped the situation?

Theresa Villiers: The serious problem that is revealed, as I shall explore in my speech, is that Network Rail is not sufficiently accountable to passengers and customers.

Henry Bellingham: Further to the point made by the hon. Member for Colchester (Bob Russell), is my hon. Friend aware that many of my constituents experienced huge disruption from the overrun of the engineering works at Liverpool Street? It is not acceptable for Network Rail consistently to blame contractors: it has to take responsibility for overruns that inconvenience the public.

Theresa Villiers: I agree entirely with my hon. Friend, as I will explore later in my speech.

John Redwood: Does my hon. Friend agree that if Labour really believed that any split in the old British Rail monopoly was wrong, it should have nationalised the whole thing years ago and proved that that was better? Of course, it is not better, which is why Labour has not done it. The railway moved from decline to growth when we privatised it.

Theresa Villiers: The reality is that Ministers now have more control over our railways than they did in the days of British Rail. They take more detailed decisions on a range of issues, such as timetabling and rolling stock, than Ministers have ever considered in the past. In Network Rail, they took the decision to create an organisation that is not properly accountable to anyoneto shareholders, passengers, customers or the regulatorand they must take responsibility for the consequences of that decision.

Albert Owen: My constituents in Wales were seriously affected by the overrun of engineering works in Rugby, but their main concern is that the lessons are learnt for the future. They welcome the upgrade of the line and the additional services that they are now getting, but what they wantsensiblyis for the regulator to look into the problems and the lessons to be learnt, so that we can have even faster and more frequent trains to north-west Wales.

Theresa Villiers: Absolutely lessons must be learned for the future, and it is sad that Network Rail has not always learned lessons from similar incidents in the past. The simple fact is that Network Rail's senior management was incompetent in failing to plan properly to get the work finished on time. I emphasise that it is senior management that has been found wanting, because the Opposition recognise the hard work and difficult job done by so many dedicated Network Rail staff, whose morale must have plummeted in recent weeks.
	Ministers were invisible as the crisis on the rail network deepened. Network Rail's failure to communicate effectively either with passengers or with the people responsible for running the trains was inexcusable. It is one thing to overrun on a possession, but the impact is far worse if one gives only short notice that that will happen. There seemed to be a blithe assumption that if a train company were given a few days' notice, its passengers could switch their plans and travel on a different day. But we are talking about new year's eve. If one is going to a new year's eve party, there is not a lot of point in getting a train on 4 January.
	At Liverpool Street, One Railway, the people responsible for running the trains in and out of the station and for getting passengers from A to B, first learned of the work overrun at about 1 am on 2 January, about four hours before the station was due to reopen and trains to start running. By then, it was simply too late to get any information to customers before they turned up at stations across East Anglia, not unreasonably expecting to be able to take a train into work. That is an extreme example of Network Rail's damaging tendency not to co-operate closely enough with train operating companies, or even keep them informed of what is going on. That approach is hindering efficiency in the railways and increasing fragmentation.

Mark Prisk: My hon. Friend makes a powerful point about the failure of Network Rail management to learn their lessons. I received a letter today from Iain Coucher in response to my correspondence. He says that, while there have been similar problems in the past,
	It is obvious now that we attempted to do too much work, in too short a period.
	The Government always make the argument that lessons will be learnt, changes will be made in the future and that things will be better at some stage. However, under the current Government, we have been constantly required to wait for that to happen. When does my hon. Friend think that the Government will learn the lessons?

Theresa Villiers: I do not think that the Government will ever learn the lessons. Not only have they asked us to wait, they have asked the taxpayer to pay more and they have asked the fare payer to pay more for substandard services.
	Passenger groups were not consulted by Network Rail in advance of the Liverpool Street fiasco either. Brian Cooke of London TravelWatch said:
	The situation at Liverpool Street is a thorough disgrace.
	Many passengers have voiced their frustration and some are even threatening strike action. Natalie Evans of the British Chambers of Commerce said:
	Today's rail problems, coupled with an inflation busting increase in fares, are simply not good enough.
	Tony Collins of Virgin Trains said that
	our customers expect and deserve better.
	Passenger Focus said that the approach taken by Network Rail broke
	every golden rule on how to treat passengers.
	Anthony Smith of Passenger Focus said:
	This is unbelievable. Thousands of passengers have booked or planned New Year travel in good faith. We feel very let down and want re-assurances that the huge amount of engineering work planned
	for 2008
	will not run into similar problems.

Nicholas Winterton: Is it not likely that the outcome of the whole sad saga will be that the regulator will fine Network Rail? Is that not nonsense, because Network Rail will merely pay with taxpayers' money? Would it not be far better to say that Network Rail should not make any bonus payments to its management, who have shown gross incompetence?

Theresa Villiers: My hon. Friend anticipates what I was about to say. We must remember that the problems were not caused by storms, snowfalls or sudden natural disasters, but simply by poor planning and project management at Network Rail and, indirectly, by the Government's failure to put adequate systems in place to ensure that Network Rail is properly accountable for its performance.

David Drew: Will the hon. Lady give way?

Theresa Villiers: No. I want to make some progress.
	It is no answer for Network Rail to blame its contractors, as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) remarked. The regulator recently concluded that Network Rail had breached its licence by failing
	adequately to evaluate and mitigate the risks associated with the project, and to manage its contractor in line with best practice.
	Network Rail
	failed to consider and plan for the possibility of an extended overrun of the commissioning works, and the consequential effect on passengers.
	The regulator was talking not about Rugby in January 2008 but about Portsmouth in early 2007 after signalling work overruns caused huge disruption to passengers over several months. At the time, the Office of Rail Regulation made it plain:
	Even though its contractor carrying out the work may be at fault for the delays in completing the work on time, ORR considers that Network Rail should have managed its contractor more effectively and is responsible.
	It seems that few lessons have been learnt from Portsmouth.

Stephen Ladyman: There is a word that the hon. Lady is studiously avoiding using: Railtrack. I agree that what Network Rail did over the new year was unacceptable and that lessons need to be learnt. However, is she seriously suggesting that that railway disruption compares in any way with the financial and personal tragedies that Railtrack, which was set up by a Conservative Government, visited on the railways?

Theresa Villiers: I am saying that there was major disruption that should not have happened. We should be debating this Government's performance in running our rail network.
	Even if Network Rail can heap some of the blame for Rugby on Bechtel, what is its excuse for Liverpool Street? If Bechtel is at fault, will the Minister tell us what penalties the contract will impose? If the contract does not provide for penalties, why does it not? Is that not a basic element of good procurement practice, particularly when timely completion of the works is so crucial in getting the railway back up and running and allowing people to get to work in the morning?

Mark Francois: I thank my hon. Friend for her courtesy in giving way again. What happened at Liverpool Street was clearly unacceptable, but unfortunately it was by no means a one-off. I have had meetings with Network Rail officials about the propensity that engineering works at weekends have to overrun so that when the track is handed back on Monday delays back up in the system. That is highly inconvenient for my constituents. Does my hon. Friend agree that maintaining the track is a core part of what Network Rail exists to do? It has to do better or the public will lose all confidence in its ability.

Theresa Villiers: My hon. Friend is absolutely right, as ever. Network Rail needs to get a grip and seriously raise its game. Its performance is not acceptable.
	Another key error committed by Network Rail was its failure to tackle the situation effectively when things started to go wrong. The problems did not come out of the blue. Possessions are planned 18 months in advance. As early as 6 December there were clear warning signs that serious problems were occurring at Rugby when there was surely still time to remedy the situation. One question that the Secretary of State has to answer today has to do with when she was first warned about the potential overrun, and when she started to take action to sort the problem out.
	As my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) noted earlier, merely imposing fines on Network Rail would not be an adequate response, as the taxpayer would pick up the bill for them anyway. As former rail regulator Tom Winsor has pointed out, the Government have removed
	the most potent instrument of...accountabilitythe ability of the regulator to inflict financial pain if the company's management commits serious sins.
	While taxpayers and passengers pay the price of failure at Network Rail, its managers still receive their high salaries and bonuses. It was confirmed in November that the 286,000 in bonuses suspended after the Grayrigg accident had been paid out to Network Rail's four senior managers, despite the serious failures that the accident revealed. Network Rail's annual report disclosed a further 362,000 of longer-term performance incentives. Last year, the pay of Network Rail's non-executive directors rose by 18 per cent. It looks as though the pay restraint that the Prime Minister has been grandstanding about does not apply to some of Labour's friends at Network Rail.
	It was, of course, a matter of huge irony that, on the very day that Virgin took out advertisements in the national press to warn passengers about the expected disruption, those same national newspapers carried news of the knighthood that the Government had awarded to the chairman of Network Rail for his services to transport.
	The fundamental problem that the House must address is that Network Rail's management is not accountable to anyone. We believe that that must change. The people who in theory are supposed to hold Network Rail to account are its members, but the Network Rail board decides who most of them are. It is therefore no wonder that that check has been derided as toothless and ineffectual.
	Reform is needed to put in place a more effective way to penalise failure by Network Rail's management, and to ensure that they are forced to listen to the regulator and their customers. Getting that right is of critical importance if we are to have the high-quality rail network that our economy needs. There are many reasons for that, but I shall outline just three.
	First, the Grayrigg accident shows that failures at Network Rail can have tragic consequences. The report into the crash revealed a catalogue of errors.

Ian Lucas: I have been listening to the hon. Lady carefully. The motion refers to the accountability of Network Rail, but I am struggling to understand what her party would do with the organisation. Would it abolish Network Rail? If not, what steps would it take to render Network Rail more accountable? She has said nothing about that so far.

Theresa Villiers: The hon. Gentleman has a treat in store as, in due course, we will publish the results of our rail review. We will explain then how we intend to tackle the problem, but this debate is about what the Government are going to do about it. They are in office, and they must deal with it.

Gwyneth Dunwoody: I am sure that the hon. Lady does not want to mislead the House, but she seemed to suggest that the Network Rail board chooses its members. She will know that anyone working in the rail industry is able to make nominations to the board, and that that includes the freight companies. The Network Rail board does not choose its membersfar from it. A perfectly straightforward machinery exists for that, and she must know about it.

Theresa Villiers: My understanding is that the board has the final say over the public members appointed, but not over the industry members. According to the latest information, industry members make up about 24 per cent. of the board's membership, with public members accounting for 76 per cent. I certainly meant to say that the board has a veto over the majority of members, and it was an error on my part if I did not make that clear. However, I am willing to be corrected.

Gwyneth Dunwoody: The hon. Lady also knows that board members are selected by an independent body. The divide is very clear. I am sure that she does not want to mislead people by suggesting that Network Rail has a veto, as it does not.

Theresa Villiers: My understanding is that there is an independent element in proposing public members, but that the Network Rail board ultimately can say yes or no to any nomination. However, I shall be happy to check my facts to ensure that I have presented the situation correctly.
	The second reason why it is vital to ensure that Network Rail is accountable is that it does not give high enough priority to passenger concerns. That must surely be a key reason why it has been so exasperatingly slow to deliver capacity enhancementmeasures such as longer platforms or short rail extensions into ports and industrial estates. As Network Rail's own business plan confirms, overcrowding is not confined any longer to busy London commuter routes. It is spread across Britain and is a serious problem, even on many off-peak trains. Passenger numbers on commuter services into Birmingham, Bristol, Leeds, Manchester and Glasgow far exceed capacity on many trains. Capacity expansion is vital to tackle growing overcrowding problems, but a recurring complaint from stakeholders is that Network Rail management are simply not concerned enough about growing the railway.
	The third reason why we must tackle the problem of lack of accountability is that Network Rail's management are insufficiently focused on keeping costs under control. This is a body that has directly received 10.3 billion of taxpayers' money at today's prices since 2002 and will get another 3.05 billion this financial year. That does not even include the further taxpayer subsidy that it receives indirectly via payments from the train operating companies. At present the reality is that neither the taxpayer nor the fare payer is getting value for money.

Bob Russell: The hon. Lady is very successfully setting out a case against Network Rail. Where is the evidence that the separation of Network Rail from the operating companies is to the benefit of rail passengers? If we had an integrated rail service, surely the problems that she is outlining would not happen.

Theresa Villiers: Things would certainly be more positive if there were more co-operation between the management of track and train. As I have stated, that is one of the weaknesses displayed by Network Rail senior management.
	The disruption around Birmingham coincided with the day that the cost of an annual season ticket to Euston rose from 7,260 to 7,608. It is no wonder London TravelWatch described new year fare rises as a bitter pill. Passengers are being asked to pay more and more, often for grossly overcrowded trains and disrupted services. The reality is that fare payers are picking up the bill for Network Rail's failure to get a grip on costs.
	So this afternoon the Secretary of State has many questions to answer, not least of which is what is the total cost of this fiasco to the taxpayer. How much have the extra engineers who were needed for the overrun works cost? Will the money paid in fineswe surely expect some of thosebe recycled and spent on rail or is it lost to the rail network? What discussions has the Secretary of State had with the Office of Rail Regulation on how to improve the performance of Network Rail? What did she do to respond to the problems revealed at Portsmouth, so many of which were repeated on this latest occasion? What discussions has she had with passenger groups and train companies about getting better performance from Network Rail? Above all, what guarantees can she give us that lessons will be learnt from the current fiasco and that steps will be taken to prevent its being repeated?
	With major projects planned for Reading, Birmingham New Street, Thameslink, and the east coast main line, not to mention the remaining stages of the west coast main line upgrade, and with work scheduled for more or less every bank holiday up to December, I am afraid that there could be a great deal more disruption in store for passengers. Some projects, such as signalling work at the Glasgow Shields junction, are still overrunning from the new year break. Is the Secretary of State confident that the upgrade of the west coast main line will be completed on schedule in December this year?

David Drew: Will the hon. Lady give way?

Theresa Villiers: No. I shall conclude. The hon. Gentleman will get his chance in a minute.
	The disruption over the new year was a monumental foul-up. What a contrast with the hope and excitement at the launch of High Speed 1 last month. The incident illustrates how vital the railways are for our economy, our quality of life and our country. The underlying problem is that when they created Network Rail the Government failed to put in place effective means to ensure that it was answerable for its actions. When it provides poor services, too often it gets away with it with impunity. The taxpayer deserves better from Network Rail; its staff deserve better; but, above all, passengers deserve better.

Ruth Kelly: I beg to move, To leave out from House to the end of the Question, and to add instead thereof:
	applauds the Government for taking decisive action to correct the flaws of rail privatisation; welcomes the fact that the railway is carrying 40 per cent. more passengers and 47 per cent. more freight than in 1997 with improving punctuality and safety standards and record investment in infrastructure; and looks forward to seeing the results of the investigation by the Office of Rail Regulation into Network Rail's performance, following the unacceptable engineering overruns experienced by passengers during Christmas and the New Year..
	I start by commending the hon. Member for Chipping Barnet (Mrs. Villiers) for her bravery in raising the issue of the performance of our railways in the first Opposition day debate of the year. I say bravery because, first, although she spoke for just over 20 minutes, she failed to make a single concrete proposal on how to improve rail services. Also, there was yet another abject failure to commit to matching Labour's investment plans for the next seven years. Secondly, it was bravery given her party's track record on rail, which was defined by years of under-investment, declining passenger numbers, closure of lines, and of course a botched privatisation. I recognise the compliment that she paid the Government when she accepted that performance had improved on the railways in the past 10 years. However, people will be incredulous that she puts the improvement down to the privatisation that took place under the Tory Government. Sometimes I think that she lives on another planet.

Theresa Villiers: Is the Secretary of State saying that she will re-nationalise the rest of the rail industry?

Ruth Kelly: Indeed not, and I beg the hon. Lady to wait for the rest of my speech. Before I tackle head-on the issues that she raised, I, too, welcome the hon. Member for Lewes (Norman Baker) to his place on the Front Bench. I look forward to his contribution, both to today's debate and to other transport debates in the coming months. I know what a keen interest he has taken in rail, and in championing the concerns of his constituents.
	Over Christmas and the new year period, there were serious, unacceptable delays on key sections of the rail network, including at Rugby and at Liverpool Street station. I regret the impact that they had on thousands of passengers. The chief executive of Network Rail has rightly apologised. He told me that he intends to learn all the lessons from the engineering works delays, to minimise the risk of unforeseen overruns in future.

Andrew Miller: I tried this question with the hon. Member for Chipping Barnet (Mrs. Villiers), but she said that it was my right hon. Friend's job to answer it. The project was huge, and there were unacceptable overruns, but will my right hon. Friend try to put the matter in perspective? I travelled down the west coast main line on Monday and saw the massive changes that have occurred. How many people-hours were put into the project over the weekend? If the scale of the work is made clear, it will help the debate.

Ruth Kelly: I thank my hon. Friend for his question. I travelled on the west coast main line only a few days ago and I, too, experienced a comfortable, reliable journey, which took two and a quarter hours from London to Manchester. The performance of the rail network has improved so considerably that I am delighted to tell the House that I can now use that route regularly, whereas after the Hatfield incident, when it was clear how chaotic a state the railways were in, some of us, including me, had to switch to the air for a period. My hon. Friend rightly says that the scale of the works was enormous. I can tell the House that in any 24-hour period, the equivalent of 5,000 people were working full-time to upgrade and renew our railways.

Theresa Villiers: If Network Rail could not cope with the scale of that work, how will it cope with all the other projects that are proposed for the rail industry in the next few years?

Ruth Kelly: The point I am making is that it is important that the full lessons are learned from the episode. The failures call into question whether the processes put in place by Network Rail to manage engineering works over the Christmas and new year period were adequate. I can tell the House today that the rail regulator has announced that he is extending his investigation in view of the concerns expressed by Network Rail's customers and funders.

Brian H Donohoe: Is my right hon. Friend aware of problems north of the border? I am sure that her colleague the Under-Secretary of State for Transport, the hon. Member for Glasgow, South (Mr. Harris), who has responsibility for railways, is. I am thinking particularly of the problems on the line between Glasgow and Paisley. Although that section of the railway is not her responsibility, does the problem not show that the idea of further fragmentation in the railway network is nonsense and should not be supported?

Ruth Kelly: I entirely agree. As I intend to amplify later in my speech, the idea that accountability or lack of accountability for the rail structure is a cause or potential cause of the engineering overruns is ludicrous. Those are separate questions that need to be addressed separately.
	It is right that I set out to the House the scope of the investigation. The rail regulator's investigation will focus on the engineering overrun at Rugby, the engineering overrun at Liverpool Street, the impact that those have had on passengers, train operators and freight operators, and the robustness of Network Rail's plans for the remaining work to enhance the west coast main line. In particular, the regulator will examine whether there are any systemic failings underlying these events. The interim report, which will be published, should be produced by the end of February. I hope that all Members of the House will agree that we should not pre-empt its findings.

Nicholas Winterton: Will the right hon. Lady deal with the question that I put to the Opposition spokesman, my hon. Friend the Member for Chipping Barnet (Mrs. Villiers)? It seems ridiculous that, by way of a fine for the incompetence of management, we should deprive Network Rail of money that would be spent on the infrastructure. Everyone admits that the problem is the incompetence of the management. Is it not better to penalise the top management by refusing them bonuses for the next three years to ensure that they produce the efficient management that is so necessary for Network Rail?

Ruth Kelly: I understand the genuine concerns expressed by the hon. Gentleman, and I, like him, sympathise with all the passengers who suffered disruption on the network over the Christmas and new year period. It is easy to say in the House that fines are no incentive for Network Rail. It is incumbent on any Member who suggests that fines do not provide the necessary incentive to say how any other model would provide an improved incentive for Network Rail.

Theresa Villiers: So does the Secretary of State think that the senior management of Network Rail should be paid their full bonuses or not?

Ruth Kelly: Certainly, if the results of the investigation by the Office of Rail Regulation suggest that Network Rail is in breach of its licence, has been in breach of its licence or is likely to be in breach of its licence in future, that would need to be taken into account in setting bonus payments, as the contractual management incentive plan, as I understand it, sets out clearly.
	Those matters are not for Ministers, however; they are for the remuneration committee of Network Rail. That management incentive plan is clearly in force and recognises those issues. It is not right for Ministers or for the hon. Lady to pre-empt the findings of the Office of Rail Regulation's report, which will focus on determining whether there were genuinely unforeseeable reasons that led to the delays or whether there was a failure of management. We should await its conclusion.

Theresa Villiers: I am grateful to the Secretary of State; she is generous in giving way. When her colleague the Secretary of State for Justice boasts about bringing Network Rail into public ownership, the right hon. Lady cannot evade responsibility for the way in which Network Rail is run.

Ruth Kelly: I am astounded by the fact that the hon. Lady is claiming that we have a public ownership structure for Network Rail, when she is not aware, as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) set out to the House, what the accountability of Network Rail is. She should know that it is a private not-for-profit company which is responsible to its board.

Jim Cunningham: I welcome the investigation, particularly into what happened at Rugby. What angers the public is the arbitrary way that that was handled by Network Railfor example, people being bussed from Coventry or Birmingham to Northampton. That caused a great deal of public anger and it is important that we find the causes of the problems. It is worth while remembering that the previous Government broke up the railways. There were 100 different companies and it was a total mess. The system was a mess in 2000we remember some of the accidents and disasters. Something had to be done. We should bear that in mind when the Opposition criticise us.

Ruth Kelly: I completely agree. The hon. Member for Chipping Barnet should not be proud of the record of her party when it was in government.

John Redwood: rose

Joan Walley: rose

Ruth Kelly: I shall give way to my hon. Friend and then to the right hon. Gentleman.

Joan Walley: Our problems stem from the fragmentation that happened during all the years of Tory privatisation [Interruption.] I am glad to see that the Liberal Democrats agree.
	The announcement that the Office of Rail Regulation will investigate the issue is important and welcome. Will my right hon. Friend give a little more detail of the extent to which the rail regulator will specifically consider what happened in respect of the west coast main line, and how much the remit of the regulator's inquiry will cover the wider issues

Mr. Speaker: Order. Please have a seat. Interventions should be brief and consideration should be given to Back Benchers who have put their names down to speak. Speeches should not be made during interventions.

Ruth Kelly: My hon. Friend is correct to raise those issues. This morning, I asked the rail regulator about his inquiry's terms of reference. He made it clear that he would broaden his investigation to consider not only upgrading and engineering work on the west coast main line, but whether there was proven evidence of a systemic problem that needed to be addressed in the management of engineering works. It will also address the point, made by the hon. Member for Chipping Barnet, whether full lessons have been learned from previous episodes, including that at Portsmouth.

John Redwood: rose

Mark Prisk: rose

Ruth Kelly: I said that I would give way to the right hon. Member for Wokingham (Mr. Redwood).

John Redwood: Is the Secretary of State not aware that last year the taxpayer gave the company 90 per cent. of its total operating costs? It is entirely a creature of the Government. It is her duty to discipline the management and make it efficient.

Ruth Kelly: I think I might know what the right hon. Gentleman's solution is: to revert to a situation in which, rather than being accountable to a membership board, Network Rail is more concerned with paying dividends to private shareholders, and  [Official Report, 23 January 2008; Vol. 470, c. 15MC.] in which Government investment, far from increasingas it is, by 10 billion over the next five-year periodreturns to a level of chronic under-investment. I would not agree with that solution, and nor would many members of the public.
	It is important that we put the episodes of Christmas and the new year into context. Today, we have the fastest-growing railway in Europe.

Katy Clark: While we are still on the issue of the investigations, I should say that my hon. Friend the Member for Central Ayrshire (Mr. Donohoe) has already raised the delays between Glasgow and Paisley at Shields Junction. I understand that the delays involve a number of private companies and raise issues, again, about the fragmentation of the railways. Can that matter also be looked into?

Ruth Kelly: I can confirm that the rail regulator has told me that he will also take into consideration the engineering overruns at Shields Junction.

Mark Prisk: Will the Secretary of State give way on that point?

Ruth Kelly: Yes, but I must then make progress.

Mark Prisk: The Secretary of State is very generous. She rightly links the issue of management performance with bonuses. As I said earlier, Mr. Coucher, the chief executive, said:
	we attempted to do too much work, in too short a period.
	He accepts that he made a mistake. Given those circumstances, does the Secretary of State think that he should receive his bonus? Yes or no?

Ruth Kelly: I have made two points absolutely clear. First, bonus setting is not for the Government; it is not my role as Secretary of State for Transport to set the bonuses of Network Rail's management. However, I sympathise with those who, understandably, feel angry about the delays and overruns in the Christmas and new year period.
	Secondly, bonuses are set by Network Rail's remuneration committee, which is chaired by an independent non-executive director and acts according to a management incentive plan that takes into account whether a licence has been breached or is likely to be breached in future. The rail regulator is examining that issue and his interim findings will be published at the end of February. I hope that, at that point, everyone will be clear about whether there was a breach of the Network Rail licence.
	As I was saying, today we have the fastest-growing railway in Europe. When the Conservatives were in power, the railways were faced with the problem of managing decline; now, for the first time since the war, we are planning for growth. Why? First, the stability of our economy has enabled this Government to double spending on our railways over the past 10 years; and secondly, we took the tough decisions required to clear up the mess left after privatisation, when the state of the track had deteriorated dramatically, confidence was shattered, and costs had spiralled out of control. The Railways Act 2005 put in place a new structure that has, for once, got a grip on costs and is delivering significant improvements in performance. For the first time in 50 years, we have a stable structure for our railways on a secure financial footing, with firm, costed plans that should enable us to double the size of the railways over the next 30 years.

Norman Baker: I wonder whether the Secretary of State agrees with her colleague, the Minister with responsibility for railways, who said:
	'Delivering a Sustainable Railway'...does not identify a need to re-open lines to deliver additional capacity.[ Official Report, 18 December 2007; Vol. 469, c. 1444W.]
	How does she square that with the massive growth that she is predicting?

Ruth Kelly: I would be surprised if the hon. Gentleman were not aware that we have firm, costed plans that are delivering within the 2009 to 2014 period. In those costed plans, we have said that there will be no line closures and that we will monitor the growth in passenger numbers over that period; if passenger numbers grow faster than expected, we will, in the following period, think about whether additional railway capacity is needed, including whether to open new lines. When we come to the second control period, from 2014 onwards, I retain an open mind on whether we need, for example, to reopen a disused rail line between London and Birmingham, whether we should have a high-speed rail link that links London to Birmingham, or even beyond to Manchester and so forth, or indeed whether other modes of transport, such as roads, should be encouraged. It is right that we take a fundamental look at these issues in the light of what is happening with the growth in passenger numbers and of a proper diagnosis of the problems. We are going through that process at the moment to prepare ourselves early for decisions that will be taken in several years' time.
	Under Railtrack, the cost of the west coast main line modernisation programme had soared from 2.4 billion to 14 billion, with no end of the work in sight. Network Rail was able to get a grip on costs, no longer underwritten by blank cheques from the Government. Its work was endorsed not only by the Public Accounts Committee, with which the hon. Member for Chipping Barnet should be familiar, but by the National Audit Office. We are seeing steady improvements in overall performance, reliability and safety. We have delivered the channel tunnel rail link on time and on budget. It is precisely because we have regained control of spending that I was, in July, able to set out the resources that we intend to devote to the railways over the next seven years and the further improvements that we expect the industry to deliver.
	The hon. Member for Chipping Barnet questioned whether Network Rail was indeed making efficiency gains. I can tell her that in this current five-year control period, Network Rail is on track to deliver efficiency gains of more than 30 per cent.a record that Railtrack was never able to match. I would be interested to know whether she would commit to match the 10 billion investment that we intend to make between 2009 and 2014.

Stephen Ladyman: We have heard Opposition Members suggest that the fare payer should not have to put any more into the railways, whereas previously they have suggested that taxpayers should not pay more. Does my right hon. Friend, who is an economist of some renown, know where the third source of money that they propose to get is to be found?

Ruth Kelly: My hon. Friend makes an excellent point. Indeed, I am still not clear about the fares policy of the hon. Member for Chipping Barnet. If she disagrees with what passengers are being asked to pay, would she and her party expect the taxpayer to pay more instead, or would they rather cut services and investment? If so, which of the projects that we have announced would they like to cut? I remind the hon. Lady that rather than people being priced off the railways, passenger numbers are at record levels, with 370 million more passenger journeys every year than in 1997a figure that is increasing year by year.

Angus MacNeil: As we are talking of passengers, is the Minister confident that the public were given the right transport alternatives between Christmas and new year, and indeed after new year, by the rail travel companies?

Ruth Kelly: That is one of the issues we need to consider. Indeed, the Office of Rail Regulation will examine the impact that that disruption had on passengers. There are clear arrangements in place under which compensation can be paid to train operating companies and, under the passenger's charter, to passengers, if they have been incorrectly sold tickets or subjected to severe disruption. I would expect those measures to be enforced.
	The hon. Member for Chipping Barnet quoted the price of a season ticket to Birmingham. I must say that I have not checked the price of such a season ticket, but the hon. Lady's contribution on fares would have slightly more credibility if she were able to get some of her sums right. I had the opportunity to read an article that she wrote recently in the  Yorkshire Post. In it she bemoaned the fact that a walk-on-and-go saver return from Leeds to London would go up from 149.60 to about 156.78, and that a walk-on-and-go open return for the same journey was going to rise from 370 to about 400. I am afraid that the hon. Lady may need some remedial maths lessons because she arbitrarily doubled the cost of the actual fare. It is no wonder she was removed from her job shadowing the Treasury, and no wonder that she is labouring under the false impression that people are being priced off the railways.

Theresa Villiers: The Secretary of State may think fare rises are a laughing matter, but many families do not. Fare rises under this Government are putting real pressure on many family budgets. The Opposition are seriously concerned about that; I would hope that she is as well.

Ruth Kelly: I, too, agree that it is important that we have correct and reasonable fare increases for individual journeys. That is why we have capped regulated fares at 1 per cent. above the rate of inflation for individual franchises over the period in question. If the hon. Lady took the trouble to investigate the average cost per kilometre, or per mile, which I know my hon. Friend the Member for Crewe and Nantwich prefers, she would find that the average cost per mile of travelling by rail is pretty much exactly the same now as it was in 1997.
	The hon. Lady makes the reasonable point that we need to simplify the structure, and make it easier for people like her to understand what the appropriate rail fare is. I am committed to making sure that that happens in the future.

Roger Gale: The right hon. Lady seems to make light of the fare increases. Constituents travelling from east Kent to London are paying infinitely more for a worse service with bad timekeeping. May I invite her to join me on an early morning train from Thanet to London? I will endeavour to guarantee her personal safety.

Ruth Kelly: I have no need to join the hon. Gentleman on his commuter journey. However, I can tell the House that I am committed to more capacity on our railways, to ensuring that the necessary investment goes in and to protecting passengers from rail fare increases through a cap on regulated fares in order that they cannot rise, per franchise, by more than 1 per cent. above inflation. May I remind the hon. Gentleman that 80 per cent. of all fares are either regulated or on a discounted ticket?

Gwyneth Dunwoody: Would my right hon. Friend repeat the question that she asked? If the money is not to come from the taxpayer or from the fare box, where will it come from? That is the point that the House has to address. Massive investment in rail can come only from the taxpayer and it is time that we all accepted that.

Ruth Kelly: I certainly accept my hon. Friend's point. It is right that the Opposition should wake up to the fact that there are only two real sources of funding for the railways: the taxpayer or the fare payer. If the hon. Member for Chipping Barnet is proposing that fares should be held down, and that the taxpayer subsidy should be reduced, only one interpretation can follow, which is that she and her party are committed to slashing investment in the railways.

Norman Baker: I agree with the point about funding, and we have identified ways of raising funds from public money, which I will set out. However, I say to the Secretary of State that the truth of the matter on fares is that since her Government have been in power, rail fares have gone up by 6 per cent. in real terms, and bus fares by 8 per cent. in real termsthis information is from a parliamentary answerwhile the cost of motoring has gone down by 10 per cent. That is a long-term trend that has actually slowed under this Government, but we have to recognise that rail and bus fares are going up while motoring costs are going down, which is contrary to what is necessary to tackle climate change.

Ruth Kelly: Regulated fares have not risen in real terms since 1997. There have been some increases, especially in open first-class and premium fares, but 80 per cent. of people travel on a regulated or, indeed, discounted ticket.

Angus MacNeil: rose

Ruth Kelly: If the hon. Gentleman will forgive me, I must make progress.
	It is essential to invest the extra 10 billion to which we are committed in the period from 2009 to 2014, and to ensure that the 1,300 new carriages and the longer platforms are provided and that the major station and network upgrades at Reading and Birmingham New Street and the renovations at the 150 stations that are due to be renovated happen.

John Leech: Will the Secretary of State give way?

Ruth Kelly: No, I must now finish my comments.
	We are not complacent. Recent events clearly show that Network Rail has much more work to do. Once we are in possession of the rail regulator's conclusions and the results of Network Rail's investigations, we will be in a position to determine what, if any, steps need to be taken to prevent a recurrence. I greatly regret the difficulties that passengers experienced in the past couple of weeks, but I ask hon. Members not to lose sight of the enormous improvements that we have made to our railway.
	Unlike the Conservative party, the Government have learned the lessons from Railtrack, as we were forced to pick up the tab for the Conservative party's failure. The Government took the tough decisions and are making the sustained investment necessary to improve the railway. We can be trusted with its future.

Norman Baker: I thank the Secretary of State for her courteous welcome to me in my position on the Front Bench.
	I do not need to rehearse the impact on passengers of the fiasco over Christmas and the new year because both other Front Benchers adequately set that out. However, the late notice given to the train operating companies has not been mentioned. The companies that operate from Liverpool Street were made aware only at midnight that there would be no trains the following day. With the best will in the world, it is difficult for a train company to arrange for alternative transport on buses and coaches when it is given almost no notice of Network Rail's failure to complete engineering works. The way in which Network Rail did not integrate with the train operating companies needs to be factored into the Office of Rail Regulation investigation.
	No one has mentioned the impact on freight traffic of the overrun of engineering works. If we want to increase freight on the railwaysthe Government seek to do thatwe must bear it in mind that predictability and guaranteed delivery times are as important for freight traffic as they are for passengers. Perhaps the Secretary of State knows that freight customers had to be told that depots at Daventry were effectively isolated by the west coast main line works and their overrun. That is especially bad for supermarkets, which rely on freight movement being on time 24/7. The impact on freight therefore also needs to be taken into account.
	If Network Rail's failures were to continueI certainly hope that they do notthat would lead to freight going back on the roads and perhaps to the Secretary of State returning to the air to get from the Manchester area to London. That would be a retrograde step. It is important that the ORR investigation takes all those matters into account and ensures that a remedy is found. The public at large and the freight operators are entitled to a railway that is safe, clean, fairly priced, cost efficient and predictable. We are getting there in some respects, but not on overrunning engineering works.
	The hon. Member for Chipping Barnet (Mrs. Villiers) referred to an episode at Portsmouth. If she had wanted to do so, she could have gone back to Paddington in 2003 when the mainline station remained closed during the rush hour because of overruns. There are several instances of overruns in recent years. On each occasion, they have led to significant disruption for individuals and, indeed, the economy. Individuals who contacted me in the past few days include self-employed people who lost much money as a consequence of an overrun. Had they known a couple of days earlier, they could at least have planned an alternative way of getting from A to B, which they could not do, because of the late notice given by Network Rail.
	We need to move towards a seven-day railway. The number of engineering works, whether they overrun or not, has been increasing in frequency over recent years. It used to be the case 15 years ago that engineering works were the exception rather than the rule. Now hardly a weekend goes by when there are not significant engineering works up and down the network.

Stephen Ladyman: Could that have anything to do with the fact that 15 years ago there was a Tory Government who were not investing in those engineering works?

Norman Baker: It is certainly the case that Railtrack's failure to deal with engineering properly has made a huge catch-up necessary. The Conservative spokesperson mentioned the words rail and track quite a lot, but seemed to avoid mentioning Railtrack at all, even though it is quite an easy word to say.

John Redwood: Does the hon. Gentleman not admit that if the Government had come to an agreement with Railtrack, we would have a much cheaper and more efficient solution than the bodged nationalisation that those on the Government Benches have brought forward?

Norman Baker: No, I do not agree with that. To be fair, some elements of privatisation worked better than others. As a matter of fact, train operating companies have been reasonably successful. However, the creation of Railtrack was a complete fiasco, with the setting up of a body that naturally wanted to prioritise money for shareholders in a monopoly situation. The way it did so was to spend as little as possible on maintaining the network. I welcomed the creation of Network Rail, which was a Lib-Dem proposalone of the ones that the Government nicked, dare I say, along with many others, including independence for the Bank of England and so on. Nevertheless, Network Rail is a much better solution and we are happy that it was created.
	Let us move towards a seven-day railway. Some of the engineering works, whether they overrun or not, are frankly unnecessary. I have been in dealings with Network RailI mentioned this in an oral question to the Under-Secretary of State for Transport, the hon. Member for Glasgow, South (Mr. Harris), in Decemberabout the works that took place over one weekend last Easter between Lewes and Three Bridges and between Brighton and Three Bridges. The whole network, comprising two branches, was shut for two days. There is no way that Network Rail could have been working on that entire stretch for two days. There are places such as Haywards Heath where it is perfectly possible to turn trains round. What Network Rail does is purely an administrative convenience. It gets a possession order for as long as possible, in order to ensure that works do not overrun if at all possible, and in the meantime passengers are sent long distances by bus, when it is quite possible for works to be planned more adequately, making that alternative unnecessary.
	It is also the caseI want the Office of Rail Regulation to look into thisthat some of the rules that apply to possessions are archaic. It is time we examined whether there are excessive rules governing how works are carried out on the railway. I am conscious that safety must be the first priority for the rail network, but

David Drew: Will the hon. Gentleman give way?

Norman Baker: I will just finish this point and then I will allow the hon. Gentleman to come in, particularly as he was not allowed to do so earlier.
	Other countries in Europe allow single-line working where there are double tracks, whereas Network Rail rules insist that the whole track is taken out of service. Other countries allow temporary points to be installed, with a 20 mph cross-over, but Network Rail does not allow that. A great deal of traffic that is taken off the railways for engineering work could move if some of those archaic rules were abandoned.

David Drew: I was trying to be helpful to the hon. Member for Chipping Barnet (Mrs. Villiers) earlier, as I will now show. Does the hon. Gentleman agree that one problem that has not been discussed, but should be, is the acute shortage of railway engineers in this country? A number of my friends are railway engineers and sometimes they despair. The problem obviously relates to the previous Government, but my Government have not really done enough to deal with it. Much of the reason for our problems, along with the acute contractualisation in the industry, which causes its own difficulties, is to do with the fact that, on occasion, there are insufficient railway engineers to conduct a proper safety case.

Norman Baker: That is true. Network Rail told me that one of the problems was the number of people qualified to reinstate overhead electrification lines. There are simply not enough people able to do that. Network Rail should have identified the problem and perhaps allowed a longer period for that work; nevertheless, it is an issue. For a long period of time when Railtrack was in operation, the required investment was not being made and the maintenance was not being done, and sadly some of the skills were lost. They have to be rebuilt for the industry.
	What should be done with Network Rail? Clearly there has been a failure. I accept the Secretary of State's view that we should not prejudge what the ORR decidesI shall not make a comment about bonusesbut the enforcement powers available to it seem to be less than useful on occasion. They are not applied fully or are applied only rarely by the ORR because the public money provided by taxpayers simply gets circulated around. That does not achieve very much. A fine imposed on Network Rail may well make newspaper headlines, but it will make no practical difference to how it operates; in any case, the targets set by the ORR are out of date and need tightening.

Bob Russell: Network Rail is receiving quite a bashing this afternoonand quite rightly, so far as London Liverpool Street is concerned, a station which directly affects my constituents. However, is my hon. Friend surprised that the Government, in attempting to give a balanced response to the motion, have not pointed out that of the 35 major projects undertaken by Network Rail over Christmas and the new year, 33 were successful?

Norman Baker: I am surprised that the Secretary of State did not make that point but, having said that, I think that my hon. Friend's point provides little comfort to those who were caught up in the two episodesat Rugby and at Liverpool Streetthat were rather spectacular failures. However, if my hon. Friend wants to remind passengers caught at Liverpool Street that something went right in Glasgow, we will have to see how that works out.

Bob Russell: indicated dissent.

Norman Baker: More needs to be done about Network Rail and I would like the Secretary of State to look further into her noble Friend Lord Berkeley's suggestion in the other place that foundation trust status might be appropriate for Network Railsimilar to what the Department of Health is considering for hospitals. The idea is that hospitals can get interested peopleas many as 10,000to sign up to being on a lower-tier board and that those people can then act as the body that elects a much smaller board to control the hospital. In this case, that arrangement could be applied to Network Rail, with the bonus that Network Rail would not then control who was electeda point to which the hon. Member for Chipping Barnet referred. It would also bring to an end the current Heath-Robinson arrangements.

Theresa Villiers: On the structure of Network Rail and following the earlier exchange with the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), I have looked at Network's Rail's website on the procedure for the selection and appointment of board members. Paragraph 28 says that public members are appointed by the board on the recommendation of a membership selection panel and later in the document it makes it clear that Network Rail's articles of association require a majority of members to be public members. Thus, the board has a veto over the majority of members [Interruption.]

Norman Baker: That is a matter for the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) rather than for me. She is welcome to intervene at some stage to make her point. It is interesting that the Conservative spokeswoman clarifies a point for the Government rather than for her own party's policies, which, as was mentioned earlier, are not at all clear. Having listened to the opening speech from the Conservatives, I have to say that their policy seems like a destination board on which it is not quite clear at which stations the trains will be stopping. Perhaps we will hear more detail when reviews or reports are discussed at some distant point in the future. What is perfectly clear is that it is inconceivable and inconsistent to argue on the one hand that the Government should do more to bring Network Rail under control while on the other to argue for a Railtrack-type solution, which moves things more into the private sector. With respect, the Conservatives need to sort out which of those directions they choose to follow rather than trying to argue for both sides of the case at the same time. I would ask the Secretary of State, however, to look further into Lord Berkeley's suggestions about foundation status.

Nicholas Winterton: Is the hon. Gentleman as interested as I am in one issue? I believe that the Secretary of State said in respect of last yearor was it for the year aheadthat 30 per cent. cost savings were expected. She talked about percentage figures, so is the hon. Gentleman as interested as I am about what that means financially and what will actually happen to that money?

Norman Baker: I will take that as a rhetorical question, not least because I cannot provide the answer. It is a valid question, however, and I hope that the Minister will respond to it in his summing up.

Stephen Ladyman: Somewhat surprisingly, the hon. Gentleman is making rather a good speech and I agree with quite a lot of it. I also believe that there is something to be said for Lord Berkeley's suggestion to give Network Rail foundation trust status at some point in the future, but how large would the board have to be to provide the sort of accountability that the hon. Gentleman is looking for?

Norman Baker: This is a tentative proposal and there will be many people with different answers to the hon. Gentleman's question, but I think that while at least 10,000 people would be needed to own the network, no more than 30 or 40 would be required to perform day-to-day management duties on a board of this nature. However, I am open to suggestions.

Theresa Villiers: How many people? Forty?

Norman Baker: Up to 40. There are currently more than 100, but the number needs to be reduced. What we need to recognise is that the present arrangement does not work, and this is an interesting idea which may provide an alternative. If there are other alternatives let us hear them, but the status quo clearly does not provide accountability, and in that respect the Conservative motion is right. In fact, having read the motion I think I agree with it, and I have come here to recommend to my colleagues that we support it. The hon. Member for Chipping Barnet has done her best to persuade me not to support it, but I think that, on balance, I will stay with her when it comes to the vote, because it criticises Network Rail in a way that I believe is right.
	A wider problem, on which I intervened in the Secretary of State's speech, is the capacity of the network. Although Delivering a Sustainable Railway makes many useful points and the Government have been moving in the right direction on rail in recent years, I think that they have flunked in one key respect: they have not grasped the nettle and acknowledged that network capacity needs to be increased far more than the White Paper suggests. By sorting out Gatwick airport and providing a bit of signalling here and a couple of extra lines around a station there, the Government have bought five or 10 years and nearly 15 per cent. extra capacity. The troubleor the benefit, if you likeis that, as the amendment says, the railway is carrying 40 per cent. more passenger traffic since 1997, and the volume is increasing every year. Even if all the improvements identified by the Government were brought onstream in sufficient time, they would not cure the problem within five or 10 years.
	The Secretary of State says that decisions can be made in a number of years' time, in phase 2 or whatever she calls it, but that will be too late. The lead-in periods for major infrastructure projects such as reopening lines or building a high-speed line are such that even if the Secretary of State or her successor decides in 2012 or 2015 to go ahead with a major scheme, it will be another 10 years before it is introduced. In the meantime, it will be impossible to meet the demands caused by overcrowding. The Government ought to anticipate the decisions that will be needed now, rather than waiting for overcrowding to become even more chronic.

John Leech: Does my hon. Friend agree that the 10 billion investment proposed by the Government is far less than is required to make such massive improvements in the railway industry?

Norman Baker: The Minister seems keen for an answer to that question, and, unlike the Conservatives, I will give him one. We have a future public transport fund consisting of an extra 6.5 billion, which recognises that money can come from a climate change charge on internal flights, from the auctioning of landing slots and from the introduction of a transport development levy on heavy goods vehicles. We know how we will pay for improvements that are above and beyond what the Government propose. The Government's scheme has been costed, but I do not think it goes far enough; our scheme has been costed, and goes further. I shall leave the economic analysis there, in the context of the three parties.
	We all need to grasp the importance of growing the network, and, as the hon. Member for Crewe and Nantwich has said, that must involve public money in one way or another. There is no alternative; we cannot PFI it. Even now, however, the Government are reluctant to acknowledge that the network must grow. There is still a mindset that holds that money spent on roads is investment and money spent on rail is subsidy, which is why it is still easy to get roads built in this countryalthough the Government have cut the programme significantlybut not so easy to get railway lines reopened or stations opened. The hurdles for rail projects are still far higher than those for road projects. If we are to take climate change seriously, let alone congestion on the network, we must change the mindset in the Department for Transport and in the House more generally.
	For 20 yearshere I am making a local pointI have argued for the reopening of the Lewes-Uckfield railway line. It is a no-brainer in economic, social and environmental terms. Network Rail is on board, as are all local councils led by all parties and MPs representing all three parties. The Government, however, are largely being weak and unsupportive. Ministers have offered warm words in support, but there has been no action from the Government. I do not wish to be over-harsh but that is the reality.

Theresa Villiers: I asked a parliamentary question about this matter and it was clear that the Government had no plans to re-open the line.

Norman Baker: They have no plans to put any money in. They would be very happy if someone else did all the work and found the funds. That is not the approach they take to roads, but it is the one they take to railways. That alternative mindset needs to be changed within the Department. I happen to think that the Under-Secretary of State for Transport, the hon. Member for Glasgow, South, who has responsibility for railways, is quite good, and I hope that he has influence within the Department.
	There are problems at Birmingham New Street, where the apparent solution is to deal with the passenger waiting area rather than with the fact that the station needs more track and greater capacity. That is no proper solution, but there is not even a solution of that nature at Manchester Piccadilly. Major bottlenecks around the country are simply not being dealt with under the Government's plans.
	According to a Department for Transport assumptionthis was in  The Times, so it must be truein 2025, oil will be $50 a barrel. That is the Department's official estimate on which it is basing its policy. I think it is wrong on that and that the price will be rather more than that; indeed, it is rather more than that now. As a consequence, electric-based transport, including rail, will become more financially attractive than petrol-based transport. The Department needs to reassess and amend its assumptions for oil prices. If it does, it may reach a different decision on what its future transport policies should be.
	The Department's current policies mean that the famous Mottram-Tintwhistle bypass

Nicholas Winterton: Where is it?

Norman Baker: The Peak District national park.

Nicholas Winterton: Well done.

Norman Baker: At the same time as that bypass is proceeding, the Woodhead tunnel, which could be used for freight transport, is being used by National Grid to install power lines. Such are the sort of unconnected arrangements that operate in this country.
	The Government have identified a number of issues in the rail industry that need to be dealt with and I accept that there are some good plans in the departmental paper. They do not go far enough, particularly in recognising the need to grow the network, but at least they are costed. Any serious party needs to have serious proposals that are properly costed. We certainly do.

Katy Clark: Clearly, the subject of today's debate is topical and important, because we should be giving extensive consideration to the structure of the railway at this time. The track record of the Conservative party in government was such that it is unlikely that anyone will listen to proposals that might come from it. We understand that the Conservatives might propose horizontal fragmentation of the railways, involving a merger of the train operating companies and Network Rail, but at this stage we do not know.
	We do know that, over the past 10 years, we have seen massive investment in the railways in this country, resulting in huge improvements in passenger services. That does not mean that no criticism can be made of the current position or that no improvements need to be made, but it is grudging of the Opposition not to recognise that improvement.
	Network Rail was created in 2004 as a not-for-dividend company. Since then, it has been largely successful, and we have seen improvements in the service provided and a decrease in delays. We have to recognise that if we are to see significant investment in the railways over the coming yearsand, perhaps, investment beyond that currently proposedpassengers will occasionally be inconvenienced by engineering work. However, we shall have to get on top of the issues that have arisen over the past few weeks and do everything possible to ensure that passenger inconvenience is minimised.
	We know that Network Rail has been largely successful in the work it has done. Delays caused by infrastructure have fallen significantly since its creationand by 28 per cent. since 2004, when it took control. It is far too simplistic simply to rubbish Network Rail.
	Some of the problems of the past few weeks have been discussed. My hon. Friend the Member for Central Ayrshire (Mr. Donohoe) and I have raised issues that have affected our constituents, such as the problems at Shields junction between Glasgow and Paisley. I was pleased that the Minister confirmed that those specific problems will be looked at and that any lessons that need to be learned for the future will be learned.
	I understand that a number of private contractors have been involved in remodelling and signalling work at Shields junction. Many Labour Members are concerned about the problems that arise when many different organisations and companies are involved in such operations. No matter how good the planning, the more operators and private companies that are involved, the more likely it is that there will be communication problems and different interests between different organisations.
	That is not a new issue. The Transport Committee has looked at it in great detail. In a 2004 report it recommended the introduction of a new public sector railway agency
	given all the powers required to manage the entire rail system.
	The report said, effectively, that the fragmentation of the railways was continuing to cause problems. One issue that we need to look at in the light of the events of recent weeks is whether the fragmentation of the railways and the number of different organisations involved has been a factor in making inconvenience to passengers far greater than it should have been and in causing overruns. I hope that the investigations promised by the Government will look thoroughly into those issues and reach conclusions.

John Redwood: What earthly difference would it have made if Network Rail had owned the trains as well as the track? It was its mistake, and it would still have been as bad.

Katy Clark: As the right hon. Gentleman will be aware, delays have reduced significantly since Network Rail took over those responsibilities, which contrasts starkly with the period when his party was in power. We need to look at fragmentation and at whether, particularly in a period when there will be huge change in the railways as significant investment is made over the coming years, the structures that exist and the levels of co-operation are such that they will ensure that the work can be carried out with the least possible inconvenience to the public.
	Labour Members would like to see further significant increases in railway capacity. There has already been a more than 40 per cent. increase in those using the railways. Clearly, such increases will come about only as a result of significant further investment in infrastructure and rolling stock, so this is a timely debate. The current set-up, whereby renewal work for the significant upgrading of the railways is undertaken by a wide range of private contractors, is not likely to ensure that the work is carried out in a way that provides either best value for the taxpayer or the best possible service to the public.

Stephen Hammond: I am listening carefully to the hon. Lady, and I think that I follow the line she is taking. Has she read the derailment report on Waterloo, where services were taken in-house? Exactly the problems that she is outlining were recognised by the rail accident investigation branch as being a major contributory factor, although the work was carried out in-house. Thus, there is no guarantee that taking things in-house will necessarily prove to be the answer that she seeks to the problems.

Katy Clark: I agree that simply taking things in-house will not necessarily mean that any problems are addressed. I am making the point that the railways' fragmentation, as undertaken by his party, as much as their privatisation, has caused so many of their problems. Although I support public ownership of the railways, one of the major issues that we need to address is the impact of fragmentation.
	The point that I have been attempting to develop is that we must move back to a unified railway system. We have heard about the significant amount of engineering work over the festive season. That is a quieter part of the year, and decisions have been taken to carry out work during such times and at weekends. If such significant work is to take place, there will be inconvenience, and we must ensure that our structures enable that work to take place.

Norman Baker: Does the hon. Lady accept that although the Christmas and new year period was quieter in terms of numbers, it is the time when people who are not regular customers use the railways? Their experience of the railways was therefore a terrible one, and the business will not grow if people who use the railways once a year experience such things.

Katy Clark: I agree. As someone who used the railways over the past few weeks, I am aware of what the hon. Gentleman describes. People will take a number of factors into account when using the railways, one of which is fares. We must accept that engineering work will need to be carried out at some point, that whenever it takes place it will cause some form of inconvenience to passengers and that this is about trying to ensure that inconvenience is minimised.
	I hope that the House will agree that the railways will provide an important part of our transport future. Compared with many other forms of transport they are very environmentally friendly, and we must invest more in technologies to ensure that they become even more carbon friendly. We must do far more to invest to make rail the preferred mode of domestic traffic within Britain, because the reality is that not only are the railways often a slower and, as the hon. Member for Lewes (Norman Baker) has said, on occasion, although not always, more unreliable mode of transport, they are often a more expensive one. Indeed, it is often cheaper to get a package flight to the Caribbean than to get a first-class flexible ticket to Scotland.
	Passengers will take a range of factors into account when considering whether to choose railways as their mode of transport. We must consider whether the structure of the railways is the most effective way of ensuring that passengers receive the best possible service, and I hope that the House can unite around that. I am grateful to the Secretary of State for her undertaking to investigate the events of the past few weeks, and I hope that the Opposition will consider the outcome of the investigations as carefully as they have considered the problems.

Jeremy Wright: It is almost always a pleasure to hear the name of my constituency on the national media, but that was not the case over the Christmas and new year period. All the adjectives that hon. Members have used to describe what happened during that period are justified and I shall not repeat them all.
	What occurred was obviously unacceptable. It was a chronic failure of management and, to be fair to Network Rail, it has accepted that. We do not need to argue about whether what went wrong over Christmas and new year was or was not a bad failure of management by Network Rail: it admits that. The question is in what way it failed and whether we can ensure that it does not fail again.
	I agree with the hon. Member for Ellesmere Port and Neston (Andrew Miller), who is sadly no longer in his place, that the project was very big, and it is inevitable that things go wrong in such projects. However, it is not inevitable that things should go wrong to such an extent, nor that it should take so long to put them right. That is what we need to focus on when we discuss what happened.
	I also agree with the hon. Members for Stroud (Mr. Drew) and for Lewes (Norman Baker) that the explanation that Network Rail has given is, in large part, that it simply did not have enough skilled labour to get the job done, not just around Rugby but elsewhere on the network. I understand that, and it is a reasonable point to make, but we have to ask at what point that became apparent to Network Rail, and therefore when it should have decided to do something about it. When we consider what we definitely know, it is apparent that Network Rail management knewcertainly by 21 December, and probably a long time beforethat there would be significant problems in the area around Rugby. However, it is not apparent what, if anything, management decided to do about it. Those are the relevant questions not only for the regulator to address when the inquiry begins, but ultimately for the Government and the Secretary of State to address.
	On 21 December, when Network Rail realised that the engineering work around Rugby was due to run into new year's eve, what did it do? What action did it take? What did it do when it realised that the work would overrun beyond new year's eve? The management has given me and others the explanation that when they talked to the limited supply of skilled engineers and electricians who had the knowledge and expertise to deal with the overhead lineswhich is what needed to be donethey all said that they had made other plans for the new year celebrations. One can understand that to an extent, although it should have been anticipated. However, the line did not reopen until 4 January. What went on in the Network Rail management offices that meant that they did not make adequate provision to ensure that the line opened almost immediately after the new year? One has to wonder whether managers made a clear calculation that the works would inevitably overrun by more than was acceptable and that the company would be fined, but that it would be easier and cheaper to pay the fine than to do what was necessary to get the work done on time. That is what the Office of the Rail Regulator will investigate, and we allespecially the residents of Rugbylook forward to the conclusions of that investigation. It seems to me that we have to ask such questions.
	Another question that should fairly be asked of Network Rail is about the information that it gave to the train operating companies. Virgin Trains suffered hugely as a result of the overrun and was not given adequate information at adequate times. After the first announcement of the engineering overrun, the Virgin Trains website said that although people could not travel on new year's eve and new year's day, for which the company was sorry, their tickets would be valid on Wednesday and Thursday. It quickly became apparent that rail travel on Wednesday and Thursday was not going to happen, either. That made Virgin Trains look foolish. The company would have made that announcement based on information that it was given by Network Rail. If that information was wrong, we need to understand why it was wrong and why Network Rail did not give out accurate information about when it realistically expected the line to reopen.
	I have said that normally it is a pleasure to hear about my constituency in the national media or anywhere else, because it is an attractive place to visit. I am sorry to say that no Member of this Houseor anyone elsehas been able to do so effectively for a long time. My interest as the Member of Parliament for Rugby is not only in the level of disruption in and around Rugby and its effect on Rugby's reputation, but in what the disruption and its consequences mean for the people whom I represent. One of the problems that the level of disruption throws up is that those who live in Rugby or travel from Rugby station see an awful lot of down sides in the disruption caused by the upgrading of the west coast main line. They cannot rely, as perhaps others elsewhere in the country can, on the hopeful prospect that one day it will all be wonderful and that they will be able to get up and down the country easily and much more quickly. For those who live in or travel from Rugby, that is not necessarily the case.
	The Under-Secretary of State for Transport, the hon. Member for Glasgow, South (Mr. Harris), knows my points, because I have made them to him before. He will be relieved to hear that I shall not go through all the detail again. He understands my case. The problem is that the overruns in engineering work and disruption affect people in Rugby as much, if not more so, as everyone else. However, those people do not have the prospect of a better service when it is all done.
	The 2009 timetable shows that not only will there arguably be a less good service down to London and back at peak times, but the services from Rugby to the north-west and Scotlandhon. Members have mentioned them in particularwill be noticeably worse. There is a tension, if not a conflict, that we must resolve. If we are to develop a fast rail line, as the west coast main line will be, of course it is right that there will be a tension between getting people from one end to the other as quickly as possible while simultaneously stopping the train at all the places where people wish to get on and off. I understand that. However, it does not seem that it can possibly be right that the improvements to the west coast main line could so effectively bypass the people of Rugby, who have suffered so much in making them happen.
	We have seen all the work on the track and the new station being put up, but there is little point in those improvements for those who live in or travel from Rugby if all they achieve is the quicker passage of other people through their town. People in Rugby want to be able to get on the train at Rugby and to go to the places to which they want to go.

Nicholas Winterton: I am taken by the moderation of the tone of my hon. Friend's speech. I entirely share his views on the point that local services will be less frequent because long distance services will be faster. Macclesfield station suffers from that, as the Under-Secretary knows full well. I shall meet the managing director of Arriva, the company that has taken over from Virgin Cross Country, and that will be one matter that I shall raise. Why should people from Scotland get to London more quickly when people from Macclesfield cannot travel to Birmingham or Manchester so frequently?

Jeremy Wright: I agree, and I was about to say that one of the most important things about access to Rugby is that it means that people are able to enjoy the town and everything that it has to offer. That is especially true for passengers from the north-west, and I look forward to my hon. Friend travelling to Rugby regularly when he and I have succeeded in persuading the Minister that there should be a better stopping service on the west coast main line.
	I understand the conflict facing the Minister. He does not have an easy task, but the problem is that those who have suffered the most from the terrible debacle on the west coast main line over the past few days are likely to benefit the least when the work is finished. That will cause greater resentment and make it more difficult to attract people onto the railways. The hon. Member for Lewes was right to say that people will put up with a bit of inconvenience once in a while when they understand that a big project has to be carried out, but that they will not do so over and over again. They will not put up with inadequate information, or with being told one thing one day and something else the next.
	If such episodes become more frequent, people will revert to the sort of behaviour that we do not want them to adoptthey will get back into their cars and drive, instead of taking the train. It will then be much more difficult to persuade them to leave their cars behind and try the railway again when the work is done and the service is as fantastic as we all hope that it will be.
	Many legitimate questions have been raised in the debate about the terrible incidents over the turn of the year. We all accept that the project was a big one, but we have to understand why Network Rail's management failed so badly. We need to know what went wrong, and to make sure that we can look people in the eye when we tell them, Use the railways, they are a good way to get around.
	At the moment, I do not think that I can look my constituents in the eye and say that. I do not imagine that the hon. Member for Lewes or my hon. Friend the Member for Macclesfield can do so either. Those of us with constituencies along the west coast main line are all in the same position, because a terrible mess has been made of improving the rail system so that people can get around the country.
	Even when the disruption is over, people along the west coast main line will not see an improvement in their rail service. They may see a shiny track, and they may even glimpse a train passing through their stations at 125 mph, but that is not what they are looking for. That is why the answers to the questions that have been posed this afternoon matter.
	I hope that the response from the Office of Rail Regulation will answer those questions. The Government must take on board the points madevery fairlyby Opposition Members in this debate about the structure of Network Rail. However, I hope that the Minister will also look at how the rail network as a whole is structured, and at how it can be made to operate for the benefit of people up and down the country over the next few years.

Nia Griffith: I very much welcome this debate. Many hon. Members have a lot to say about what is happening on the railways, and those of us who believe firmly that the rail service can make an enormous contribution to the fight against climate change want to ensure that it is as good as it can possibly be. Rail travel can be extremely quick, and it is much safer than road travel. It has a significant role to play in helping to combat climate change. The Climate Change Bill will set the challenging target of reducing carbon emissions by at least 60 per cent. by 2050, and greater use of the railways will be vital if we are to achieve that.
	However, there is a genuine problem with the services offered on Sundays. I fully understand that our rail networks need to be maintained and upgraded, and I support that. I also appreciate why much of that work has to take place on Sundays, but I want to question our attitudes to Sunday services. Under this Government, there have been considerable improvements in the frequency of some trains and in the quality of rolling stock, but in many parts of the country the attitude to the provision of Sunday services remains very outdated. In those areas, the approach seems to be that train services exist only to transport workers five days a week, in a world where annual holidays last from Saturday to Saturday and football matches are only ever played on Saturday afternoons. However, the world has changedas anyone who has been to an airport or shopping centre on a Sunday will know.
	People want to travel on Sundays. They may want to have a family day out at the seaside or attend a sporting event or go shopping, but they invariably find that they cannot make the necessary return journey by train on a Sunday. Anyone going away for a weekend, or a student coming home from university for a weekend, will want to travel on a Sunday, but railway services are very restricted. For example, the earliest that people can leave Llanelli on a Sunday is 11 am, which means that they cannot get very far. They cannot get to the seaside until after lunchtime, and if they want to come to London they will not get here until late afternoon if they are lucky and have not been delayed too many times by various transfers on to buses and other delaying tactics that seem to beset the railways on a Sunday.
	I have often found that Sunday services are crowded, especially during the evening when people are trying to get back from weekends away. Many people are completely put off travelling on a Sunday by the lack of trains, the lack of choice of routes, overcrowding or because they really cannot face the unpredictable delays and the inconvenience of struggling with heavy luggage in and out of stations and on and off replacement bus services.
	We had exactly the same problem on Boxing day. Many of us witnessed traffic jams on Boxing daya day that is now popular for sporting events and that many families can enjoy out together. If we want to encourage people to leave their cars at home and to go by train we need services that they can use. Likewise, many people who go away to visit friends or relatives at Christmas have no option but to use their cars, because they simply cannot get back on Boxing day ready to go to work on 27 December. Effectively, if people want to use the train to go away at Christmas, they have to be able to leave relatively early on Christmas eve, stay away for at least three nights and come back on 27 December. In many other countries there is a much more comprehensive service on Sundays and Boxing day. That is what we need here. Travel is an important part of people's leisure activity and we need a much better service on Sundays, with more frequent trains and far less disruption to services.
	I would like a much more organised approach from Network Rail to the maintenance and upgrading of our railways. It seems to be very inflexible in the way it works. As other hon. Members have said, it seems to take out an entire track or area for weeks and months at a time. Perhaps 200 miles of track seems to be affected. Instead, it could take the work bit by bit and say that from one station to another might be closed for a month, and then the next one and the next one. It has taken out the entire line from Llanelli to Newport. It can be immensely inconvenient to go from one tiny station to the next by bus.
	The other problem is that once Network Rail has fixed its dates it is incapable of changing them. We had a poignant example last year. A big match was taking place in Cardiff and many people would have liked to take the train to it. Although there were weeks of notice, Network Rail was inflexible and unwilling to change its arrangements, so it was impossible for anyone to use the railway on that day. Many people who would have enjoyed relaxing on the train and arriving in Cardiff without the fuss of finding somewhere to park had to drive down the motorway with so many others and wait in traffic jams and queues to get into the city. There is a lot to be said for keeping a close eye on what Network Rail is doing and I implore the Minister to require strong answers about recent events during the recess and to look to the future at exactly what Network Rail can do to guarantee that its work will be much less disruptive.
	On a more positive note, I welcome the Government's proposals for simplifying the fare structure. I look forward to the implementation of a ticketing system that will ensure that passengers are sold the best available tickets for a journey. I understand that that will be in place by the autumn. It is very much needed, because the present system leaves people confused, especially if they are travelling from one area of the country to another. There seem to be so many different types of tickets and operating procedures.
	We are all concerned about what happened during the recess, but there is a tremendous future for the railways and I would very much like to see that we get the problems sorted out so that people can have confidence in our service and we get more people out of their cars and on to the railways.

John Redwood: We saw a sorry performance from the Government Front Bencher this afternoon. There was a complete lack of analysis of what really went wrong, and a complete absence of remedies to make sure that, in future, money is not wasted and there are not so many delays. There was no real understanding of the structure that the Government created in their new Network Rail company, and there was no real, sincere apology to all the people whose travel arrangements, local stations and rail tracks were disrupted over the Christmas and new year period.
	The Government are backed by Labour Members who seem to believe in a couple of mythsin ideological baggage left over from the old socialist period. One of them is the proposition that a nationalised monopoly railway, taking us back to the golden age of British Rail, would be a lot better, and the other is the proposition that fragmentation was the cause of the recent delays and problems. I shall consider those two myths before providing a bit of analysis on what is wrong with Network Rail, how it could be put right in the short term, and how it could be made a lot better through fundamental structural change in the medium or longer term.
	Let us deal first with the myths. We are invited to believe that the nationalised monopoly between 1947 and 1993 was a paragon of virtue, which never delayed people, produced extremely good services, and delivered a much better railway for less money. Those of us who have read the history books, and some of those who are old enough to have lived through that period, will know that the reality was very different. Between 1947 and 1993, the nationalised monopoly was in continuous decline. I am not making a party political point. It did not matter whether there were a Labour, Conservative or Labour-Liberal coalition Government; the system did not work.
	Over that long period, there was a continuous trend: a fall in the proportion of our freight carried by rail and of passenger journeys by rail. People voted with their feet and their pocket books for the flexibility of road travel. Hauliers came into the market and took the freight business. Indeed, the nationalised monopoly railway stopped competing for most freight business, because it decided that it would not do single-wagon marshalling at all. It decided that it was interested in rail freight business only if it involved complete train loads, and if there were a reasonable number of trains a day, or a week. There were only a few people in the country with enough business to get an offer from the railways to run rail freight.
	It was not surprising, therefore, that there was a big decline in rail freight and passenger movements. The decline was accelerated by the gross financial mismanagement that characterised the nationalised railway under all Governments over a long period. During the period in question, huge subsidies had to be put into the railway. Despite those large subsidies, fares rose in real terms year after year, which put people off using the railways. Those on low income were deprived of any realistic chance of access to the railway, because rail travel became prohibitively expensive. It was a double whammy: the system was bad for the taxpayer, who had to subsidise it, and bad for the fare payer, because fares kept rising in real terms.
	From time to time, under Treasury pressure, the railway was forced to cut services and to make closures. Sometimes there were a lot of closures all in one go, as in the case of the notorious Beeching cuts. More often, there was a dribble of closures, year after year, as and when Governments thought that they could get away with it. The nationalised monopoly always presented Governments of all persuasions with exactly the same cruel choices: Pay up, or we close lines; Pay up, or we close services; and Pay up, Minister, or we will pick on your line for particularly bad treatment. That was the brutal political reality that characterised the rows between the nationalised monopoly and Labour or Conservative Governments.
	I find it surprising that after all these years of allegedly new Labour, the Labour party has not moved on in its thinking and realised that that was not a particularly good model. It was not even a good model for the people who worked for the railway. The nationalised monopoly kept sacking people, because as it retreated, made cuts and reduced services, it had to take cost out, although the costs still grew unrealistically. An awful lot of people were therefore made redundant into the bargain.
	I think that Ministers understand those points, because we are 11 years into a Labour Government and there is absolutely no sign that they wish to recreate a nationalised monopoly. One cheer for that. We have some common ground, and some agreement. I do not expect any Minister to leap to his or her feet this evening and suggest that the record of the nationalised monopoly under Labour Governments was particularly fine. Ministers know that what I say about fares, service quality, delays, reliability and redundancies is all too true of the nationalised railway monopoly. Those on the Front Bench have at last realised that there needs to be a different model, and that a nationalised monopoly is not run by the Government but runs the Government, bosses the Government around and does not deliver for all the money that is put in.
	However, many Labour Back Benchers seem to think, fondly, that there was a golden age of nationalised monopoly and, fondly, are misled into believing that their Government might one day recreate that nationalised monopoly. I should like to assure Labour Members that I do not believe that there is any chance of the present Labour Government recreating the nationalised monopoly of their dreams. The Government could not afford to nationalise the train companies, and they know that it would be a disaster trying to run the railways as they were in the 1970s and 1940s under Labour Governments and in the 1960s and 1980s under Conservative Governments. It was the failure of the nationalised monopoly that drove the Conservative Government into fundamental change, which ushered in a new era for the railways.
	As someone who was involved in the decision for railway privatisation but who did not recommend the scheme that was chosen, I have no need to defend that scheme. The decision to introduce some element of private capital and some element of competitive choice and challenge did enough to transform the railways. We need turn no further than to the right hon. Member for Kingston upon Hull, East (Mr. Prescott), who has praised the way in which the privatised railway post-1993 moved from retreat and decline to an era of growth and development.
	Ministers regularly use figures for the 1993 to 2007 period and, of course, they like using figures for the 1997 to 2007 period, when they can claim more of the credit. Whichever period one chooses, it presents a very different picture from the previous 40 years. It is a picture of growth in passenger travel and in freight transportation. Many of the present problems of the railways are the kind that one wants in a business. They are the problems of too much pressure of demandmore people wishing to use the railways and more people frustrated that better use cannot be made of those fabulous routes across the country and into the centres of our leading towns and cities, which are at present in the monopoly custodianship of Network Rail, the subject of the debate this evening. We seem to have some agreement that privatisation kicked off something that was rather good.

Tom Harris: In spite of myself, I am enjoying the right hon. Gentleman's contribution. It is good to know that we do not have to wait for the publication of his memoirs to see that he disagreed with his Cabinet colleagues on the nature of the privatisation of the railways in 1993. Before he goes on to the consequences of that privatisation, would he mind sharing with the House his specific reservation with regard to the financial structure of Railtrack, the rolling stock companies and the passenger franchising system?

John Redwood: My problem with the structure that we chose and with the Government's structure is that I think we left too big a monopoly element in the track. The evil is monopolyit is not public ownership so much as monopoly. As all the economic textbooks rightly tell us, monopoly does in the customer. It always charges too much and delivers too little. It always looks after the interests of the owners and the senior managers. It does not look after the interests of the customers or even of the more junior employees, who do most of the work. So it is a nasty system, and even public ownership does not tame monopoly sufficiently to get rid its evil consequences.
	At the time, I favoured splitting the railway into regional rail companies, which would allow competitive challenge over time, because they would have to re-bid for franchises; so it was not a perpetual monopoly for them. At the same time, it would allow others to come in and build new track or suggest new services, so that there was some element of contestability where the tracks could, in certain circumstances, be used as a common carrier and would not necessarily remain the monopoly preserve of the regional company. The basic structure was to go back to regional companies.
	Although I do not think it necessary, reconnecting track and train can make sense. I was a strong opponent of the London underground system developed by the Government, because I thought that splitting track and train in confined tunnels was particularly foolish. I proposed the pro-competitive solution of splitting things into competing companies that owned track and train entire with their own lines; I think that that would still be a better answer, given that the system has gone bankrupt in one major company and is obviously struggling.

Tom Harris: I am grateful to the right hon. Gentleman for giving way once more. Would he like to share his thoughts on the fact that European legislation prevents the ownership of trains and tracks together?

John Redwood: I am not an expert lawyer on that issue; nor am I any kind of lawyer. However, my understanding and reading of the situation is that European legislation does not prevent that. That legislation requires more competitive challenge than a nationalised monopoly would allow, so I find myself in the curious position of supporting the thrust of those European regulations and that legislation, because competitive challenge is a good thing.
	I turn to the second myth that I want to dismiss before going into the future, where the Minister wants to tempt me. That is the myth, which we have heard throughout this debate, that the particular problems of the constituents of my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) and others were caused by fragmentation. That is complete nonsense. If Network Rail had been British Rail recreated, owning the trains that could not run, that would have made absolutely no difference to its mistake over the engineering works at Rugby and Liverpool Street. The same people would still have made the same miscalculation of failing to deliver enough engineers to sort out the complicated project within the deadline.
	I am afraid that Labour Members who think that fragmentation caused the problems during the Christmas and new year are simply wrong. The problems were caused by Network Rail's gross management miscalculation, and would have happened whether there had been fragmentation or not.

Jeremy Wright: I agree entirely with my right hon. Friend. Does he accept that if Network Rail's management themselves say that there has been a management failure, there is no need for the Government to look for any other explanation?

John Redwood: I agree, and I hope that the Government will not waste money on that. If Network Rail were a business reporting to me, the problem would be so obvious and would be sorted out with a timely and lively exchange with the senior management. I shall come to that when I discuss what power the Government have over that particular creature.
	First, however, I should like to dismiss the fragmentation argument. If we compare the rail industry, which has all the problems that we have describednot growing quickly enough, fares too high, inadequate service for many peoplewith the aviation industry, a successful public transport industry in this country, the contrast is telling. The aviation industry is completely fragmented; on the Labour analysis, it should not work at allit should be delaying passengers, putting fares up and doing all the bad things that the Labour Members I mentioned seem to expect.
	The aviation industry is totally fragmented: there are competing public and private owners of airports, there is a privatised company dealing with air traffic services and a range of competing companies deals with luggage, other services and the retail offer at airports. Furthermore, competing companies own the planes and fly people around.
	Aviation is more complicated to control. If there is a mess on the railways, all the signals can be put on red and problems can be sorted out. However, if a mess is made at an airport, a load of planes will stack up without much fuel and things cannot suddenly stop for a couple of hours so that problems can be sorted out. There would be a real disaster on our handsthe aviation system is much more complicated, working in three dimensions with limited runway space for landings. An awful lot of people would be at risk as they flew above the airport without much fuel in their planes.
	The system shows that if we trust competitionwhat the Labour Members I mentioned would call fragmentationwe get much lower fares, much faster growth and much better passenger satisfaction. There is a much better range of offerings at a typical airport than at a typical train station. Airports usually offer a more pleasurable experience, except when the Government intervene on the security side. Aviation attracts a lot more people and delivers far more.
	The Government's problem is that aviation is a runaway success. They do not like that, as they do not think it green enough and it uses a competitive challenge model. Railways, which they think a greener way to travel, are not a sufficient success. Whether railways are greener is arguable; that depends on how many people are travelling and how old the train is, although they could well be greener in some cases. The Government have problems with the rail industry because a lot of monopoly is still left in it.
	Let me turn to the main focus of the debate, which is Network Rail. Ministers would lead us to believe that this business is an independent private sector companythat it just happens to have a different structure from all other private sector companies, that it just happens to be set up by the Government, that it just so happens that the Government own all the shares, and that it just so happens that the Government give it the bulk of its revenue. Ministers must be living in cloud cuckoo land. It is a Government creaturethey can do anything they like with it. They can come to this House today or tomorrow and change its whole structure, and nobody will object because all the people on the board, the membership list and so forth are creatures of this Government, put there for some strange purposepresumably to try to pretend that its borrowings are not properly public sector borrowings but are in some mysterious way private sector borrowings. Of course, they are as public as any borrowings could be, because they all have a Government guarantee. The only reason that Network Rail has been trading without qualified accounts and having access to banks is that it gets a guarantee from the taxpayer.
	The company's financial structure is remarkable. It is a rather tiny company, as its net assets are only 6.3 billion. After all the billions of expenditure and with potentially billions in assetsor so one would have thought, given all these fabulous routesthe company's net asset value is 6.3 billion. To put it in context, that is just two years' worth of the revenue subsidy that the Government tip into the business. However, the business has more than 18 billion of net borrowings, or net debt, because it has a Government guarantee routing private sector money into it.
	Even more remarkable is the revenue account. Last year, 90 per cent. of the operating costs were paid for by a revenue grant. Those who confuse investment and revenue subsidy complicate the debate to no little extent. Yes, the business needs investment, and yes, it is making investment, but it survives only because a colossally high proportion of its operating costs are being paid by a revenue subsidy. That does not happen to the competing road haulage or road passenger industries in the way that the Liberal Democrats imply; they seem to have mistaken investment money for revenue subsidy money.
	This business is not efficient or well run, and it is not in robust financial health. It is there entirely because the Government support it with revenue and with guarantees on capital account. Its management do not seem able to make their business more efficient or, despite endless fare increases, to be able to do enough to grow the business so that the revenue strand from the fare payer overtakes that from the Government and becomes the dominant influence in the way one assumes that Ministers would like, given that they too must be rather worried about its huge dependence on revenue subsidy.
	We are also led to believe that Railtrack failed because it did not invest enough. If the Minister looks at the figures, he will see that there was a quantum leap upwards in the amount of investment going into the railways after privatisation compared with pre-privatisation performance under Labour, Labour-Liberal and Conservative Governments at the time of the nationalised industry. In the last two years of its existence, before it was so rudely terminated by the Government, Railtrack had invested 5 billion, and then 5.3 billion in successive years. That shows that it was making a substantial commitment to the improvement of the railways, bearing in mind the fact that in the last couple of years of the nationalised industry the investment level had been about 2 billion. The privatised industry managed to invest at two and a half times the level achieved by the nationalised industry in its dying years. If Members wanted to rush to their feet although they do not seem to beto say that that was because there was a Conservative Government, I should say that the investment record under Labour and Labour-Liberal Governments was equally gloomy. There was not a sudden big reduction in railway investment when the Conservatives came to office in 1979.
	Quite a lot of the railway investment under nationalisation was ill-judged. It went on glamour projects and on switching traction methodsparticularly electrification, where the benefits are somewhat arguablerather than being concentrated on better types of train, such as lighter or better braking trains, that could be used more frequently on the network, which must be the answer.
	I now wish to be a little more creative and say what should happen from here. First, we all want the management of Network Rail to be made accountable for the egregious errors that we all agree have occurred in recent weeks. Those are not new errors, as my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) pointed out. It did not learn the lessons from previous mistakes when engineering works had similarly overrun. As my hon. Friend the Member for Rugby and Kenilworth pointed out, they were eminently foreseeable errors. Those involved had to undertake a survey of quantities. They needed to know how many man and woman hours of good engineering skill they needed, and to understand the complexity of the task ahead of them. The main thing that management should do in such a situation is break the job up into manageable units of work, and create a contingency for things going wrongpeople not turning up on new year's day because they may be preoccupied, a bit hungover or whatever. Instead, they crammed too much into a limited time, and on two separate occasions they had to come to industry and the travelling public to say, We've overshot. We can't actually manage it.
	Some Labour Members seem to think that it is a sufficient excuse to say, Oh well, some of this work entailed private contractors, which again shows that fragmentation was wrong, but it was a mistake to use private contractors. It was the call of Network Rail, the Government's own creature, whether to use private contractors or to hire the staff in-house so that they were permanently on its books. That is a matter for Network Rail; I do not have an ideological bias on that. Sometimes it is better to have one's own people in-house, and sometimes it is a good idea to use private contractors. People need to form a judgment based on how often they use them, how much they cost and how competitive the consultants and contractors are.
	We pay very large salaries to Network Rail senior executives so that they can decide such matters for us. Ministers should be supervising that process. If senior managers cannot make such judgment calls sensiblyif they get the balance between in-house staff and private contractors wrong, if they get the bills of quantities wrong or if they cannot work out how long a given type of engineering will takethey simply are not up to the job.
	The defence of Ministers is to say that that is not really any of their business because they have created an independent private sector company, and it is up to the board of the company and the remuneration committee of the board to take the necessary decisions. My view is very simple, and I think that it is shared by most members of the public. If a business is 100 per cent. owned by the Government, if 90 per cent. of its operating costs are paid for by taxpayers' subsidy and if all its borrowings are guaranteed by the public, we should expect our representativesthe Ministersto hire the best managers, and fire them if they get it wrong, or to find a way of making sure that they do not get it wrong again.
	I found the evasive answers from the Secretary of State on the matter of remuneration and bonuses both surprising and depressing. If I were running a private business and my managers had done something wrong, the first thing I would say to them, after one had got to grips with the magnitude of the error, would be, Of course, there won't be any bonuses this year. I think that they would then say, Well, if that's all you're going to do to us, boss, we've got off quite lightly. Can we keep our jobs? One might hear that sort of thing in the private sector context. Why do we not have that sort of feeling in the public sector? Ministers should have a private but lively conversation with the managers in this company to tell them that this is not only unacceptable, but that there has to be some visible financial penalty on senior managers.
	We are talking about people earning exceedingly large sums of money. I do not want to penalise those at the bottom of the heap who did all the work and did not get paid much for turning up on a wet and cold December night, but the people at the top, who have made the misjudgments, have to feel the penalty in their pocketbook. The least that one would expect a Minister to say is that the performance pay element will either be abolished or much reduced, because performance has been sadly lacking in this situation. I do not know of anyone who will write to me saying, How disgraceful of you to say that these highly paid people cannot have their full bonuses this year, given the suffering that people went through when they could not get their trains at Christmas and new year, and when they saw their stations and services so disrupted.
	We need Ministers to tackle the rather ramshackle structure of Network Rail and to put in place a serious board with a limited number of really good people who can provide a critical appraisal of senior managers and provide focus through the remuneration committee and board meetings to ensure that such things are unacceptable to the board and, therefore, are less likely to happen in future. It will not help to have 100, 1,000 or 20,000 members, or whatever. That is completely bogus. It is mock democracy, whereas I am a true democrat. If it is to be proper democracy, all 60 million people, or all 45 million taxpayers, have to be involved because we are the stakeholders. We are the ones who are paying the bills. However, that is not realistic. We have representatives to carry out the process for us, and they are called Ministers. Ministers have to appoint a limited number of really good people, who can ride the business hard and ensure that it performs to proper commercial disciplinesif they want to carry on doing things the Network Rail way.
	Let us get away from the myth that Network Rail is a completely private sector entity, and let us see Ministers laying down, at least once a year, at corporate plan and Budget time, what they expect for the 3 billion-odd of Revenue subsidy and what they expect for the several billions of guaranteed investment moneys borrowed on the taxpayer tab. We need to see performance, and there have to be results to show for such a sum of money going into the business. I see no evidence from today's debate, from reading the papers, or from previous debates on the subject that Ministers have seriously entered into the complicated but important task of setting feasible, limited objectives for the expenditure of that money, and determining how they will hold people to account if they do not achieve them.

Tom Harris: On a point of clarification, the right hon. Gentleman may have missed the publication in July of the Government's White Paper, which contained the high level output specification. That specifically states what we expect to buy from Network Rail in terms of performance and efficiencies. It sets out explicitly the statement of funds available. It sounds to me as if he has just described what we have already produced in July. He referred to that being done on an annual basis, however, and we are doing it on a five-year control period basis.

John Redwood: The Minister put it very nicely, but of course I have seen the high level outputs. I would not come to such a debate and do the House the discourtesy of not having read a little of the background material.
	The Minister outlines the first part of the process, but it is necessary to take the high level outputs and the five-year plan and turn them into something that relates to the half-yearly and annual reporting cycle of a proper companythe Government say that Network Rail is, but I say that it is not. That process has to take place at a more detailed level through the eyeballing of senior management in the ministerial office.
	When I was a middle-ranking Minister, one of the main things I did was to have annual corporate plan review meetings with the bodies that reported to me, and those were very serious meetings. I prepared very strenuously for them; I trust that the people on the other side did, too. They were rather foolish if they did not. I used those meetings to say, You'll be very pleased to hear from a Minister like me that you are going to get some money, but I really expect you to make that money work very hard. This is how I expect you to make it work hard. These are the rewards for success, and these are the penalties for failure. That has to be a ministerial function, and if the Minister is going to insist on doing it through a so-called independent remuneration committee, he will have to hand pick that committee and brief its members so that he knows they are in line with his wishes.
	As far as the top people are concerned, it is more important for Ministers to get involved. We need to see performance, and the Minister needs to see it in return for all this money. The money has to be limited. It is a huge task: we have a massive railway that needs injections of cash for growth and development. It is very clear that it is not being well run or managed at the moment.
	I want to see medium-term reform. Even with the improvements I have suggested, I am sceptical about how well a Network Rail monopoly would work. I have been honest with the House. I do not think that Railtrack was brilliant, either, but Railtrack and Network Rail are not very different. They have the same principal problem, which is that they are monopolies, and it is difficult to make them responsive.
	I have a slight preference for Railtrack because it had more of the disciplines of the market. It was driving efficiencies a bit betterdecreasing subsidy and increasing investment. It had to respond to market disciplines on many of its borrowings and activities in a way in which Network Rail does not. The Government have relaxed the constraints on the railway track monopoly and that is why they have problems with overruns, delay, poor service and high costs.
	The costs have mushroomed massively since the Government took office. The Government tell us that they have been fighting a battle over the past two years to get them down again, but the costs took off in the early Network Rail period because the disciplines were relaxed.
	I would prefer a system whereby track and train were reunited and there was more contestability so that no one in the business felt they had a monopoly right in perpetuity. Of course, one has to give a regional train company, which also owns the tracks, a reasonable run at it or it will not make the necessary investment. One has to give such companies specific guarantees and they have to have a decent opportunity to make investing the capital worth while. However, they must also know that, at some point, they have to try again to maintain the franchise. The quid pro quo is that one has to tell them that they can sell on the capital that they have invested and the capital that they bought and inherited so that they know that, if they are unsuccessful, they will not wipe out their shareholders. There must be a penalty but it must not be so harsh that no one will take the risk or make the venture.
	Contestability is also required. The ability to run across other people's regions and to use the track more intelligently and better is necessary. An independent regulator or adjudicator, who can decide how the track can best be used, is also needed.
	At the beginning of my speech, I referred to the tragedy of having fabulous routes that are not used enough. If one flies over southern England in a light aircraft at peak hours in the morning, one sees completely jammed roads, with vehicles bumper to bumper as people try to use cars, buses and motorcycles to get to work, and practically empty train tracks. The way in which the railways are currently run means that few trains an hour can be operated on those tracks. Typically, only 24 trains an hour can run given the existing technology. We need to operate far more than that to deal with peak hour demand. The railway is better for that than for dealing with off-peak demand because frequent services are required to make rail travel attractive. The best green advantages and time advantages of using the railways are obtained at peak times because the roads are congested and therefore polluting more. We need much more peak time rail travel.
	How do we achieve that? There is an easy answer in the short term, before the technology and structure are fundamentally changed. If lighter weight trains are used, more of them can be run because they accelerate and brake more quickly. That happens on many networks abroad. In Britain, our system is over-engineered and heavy. Other hon. Members have referred to the complexity and absurdity of many of the rules for taking possession of the track for engineering works. I agree, but there is another set of rules for operating a railway that militates against using modern, state-of-the-art lighter weight trains, which are perfectly safe when used elsewhere and mean that more trains an hour can be operated.
	The current engineering director of Network Rail, with whom I have had conversations, accepts that lighter weight trains could make a difference. It would be a great prize, which Ministers might like, if one could run, for example, 40 rather than 24 trains an hour. I hope that they will take seriously the proposition that, if one used trains that can speed up and slow down more rapidlyof course, signalling changes would also be required to deal with that, but they could be made within the system budgets; it would be much cheaper than building new tracka big improvement in the railways could be achieved. My hon. Friends the Members for Rugby and Kenilworth and for Macclesfield (Sir Nicholas Winterton) pointed out that under this Government the railway is going in the opposite directionunless one lives at a terminus or near a large principal station on a main line, all the expensive works may lead to a deterioration in the service because the fast trains may not stop in one's town or city. The fast trains occupy much track space and time because they need good clearances for a long time for safety reasons as they belt along the main line route. If there are not enough bypasses or additional railway track, they clutter the track and reduce the frequency of the more mundane commuter short-hop services, which may be more important to a good travel system.
	I hope that the Ministers will consider, in the investment programme, the balance between the glamorous, fast services to a few major cities and the important daily services that people in Rugby, Macclesfield, Wokingham and all the other places represented in the House this evening need. Those services are also needed to provide a greener and better alternative for people's travel plans.
	Our debate rightly focuses on the unacceptable events over Christmas and new year. Even Ministers agree that the delays were unacceptable and that a mistake was made. They say that they need a further period of reflection and inquiry to discover the mistake. Most of us believe that we know what the mistakes were from what we have read and seen. The statements and apologies made so far imply that the events were caused by a management failure by Network Rail.
	I do not believe in public hanging or crude prose, which some people might believe to be appropriate in the circumstances. Far from it. I believe that we get the best out of people through incentive and motivation. However, when errors are so big and their impact is so great, there must be a penalty. I believe that it should be a financial penalty on senior management rather than, There, there. Please make sure it doesn't happen again.
	The Government say so oftenthere are many examples in recent weeksthat they will learn the lessons. I have heard nothing in the debate so far, especially from the Secretary of State, that makes me believe that she has learned any lessons. She has learned no lessons about how to get value for huge sums of public money; how to control a so-called not-for-profit independent private company, which is a creature of the state; how to choose good people and persuade them to do a good job; or how to turn an incompetent Government into a competent one.
	I want to live in our great country and enjoy its facilities. I am afraid that so many facilities that the public sector owns are not well run. There is an aura of incompetence about them. When the Minister sums up, he will use all the buzzwords and buzz phrases that are on the pager or in the briefing, along with the civil service line to take, followed byif ministerial briefings still contain itdefensive, for when a Minister is under pressure or things are getting bad and, over the page, Now you're on your own. Bad luck. We want to go beyond that. It would give me great pleasure if the Minister said, A lot of what you said is sensible and we will try to work out a better way of employing top managers at Network Rail. It would be wonderful if he said that the Government would work much harder to get discipline over spending 3 billion a year of Revenue subsidy and several billion of investment and break down the high level outputs into management units that make sense and can be built into people's incentive packages. It would be good if he said that the Government would reconsider the programme's balance because they did not want to end up with people in Edinburgh, Glasgow and London being happy but those in Rugby, Kenilworth, Wokingham, Macclesfield and so on were not being happy because their services had been worsened by the hugely expensive investment programme.
	My hon. Friends on the Front Bench tabled a fairly narrow motion because the anger of the country is currently focused on what went wrong at the weekend and over the long Christmas and new year holiday. However, there is also a strong feeling in the country that we would like to be greenerin some circumstances, travelling by train is greener than using other meansbut the service needs to be accessible, friendly and feasible. We do not feel that the railway industry is ours, except when it needs someone to pay the bills, and we do not feel that, managed by the effectively nationalised monopoly of Network Rail, it is customer friendly. Apart from events over the Christmas period, it does not appear to look to a future of frequent services, lower fare packages and opportunities to use the trains that people want.
	I hope that the Minister will take the opportunity to reflect a little more on the mismanagement, realise that it was not a one-off and that it will happen again unless there is some fundamental change in the Government's approach to railway management.

Peter Soulsby: There is no doubt that the rail industry in the UK is challenged by its own success. The 40 per cent. increase in passenger numbers that we have witnessed over the past 10 years and the projected continued growth in numbers is something that the rail industry in general and the Government need to respond to positively. I am delighted that the Government have indeed responded positively, with the White Paper recognising the need for continued investment in the railways, both in the short term, through the provision of longer carriages and longer platforms to accommodate them and the renewal of many outdated stations in order to make the facilities that they provide more fitting for the numbers being carried, and in some of the major projects in which the Government are investing, such as at Birmingham New Street station and in Reading, as well as Crossrail, which we debated comparatively recently, in which 16 billion is being invested.
	All that is welcome, but there is no doubt that hon. Members in all parts of the House were angered and disappointed by Network Rail's performance over the Christmas and new year period. However, it is important to put that into context. The right hon. Member for Wokingham (Mr. Redwood) talked about Railtrack, the predecessor organisation, having beenI think I quote him correctlyrudely terminated. However, there were few in this Chamber or elsewhere who shed tears at its termination. Whatever one thinks of the overall effect of the rail industry's privatisationwhether one thinks, as I do, that the whole thing was botched and resulted in fragmentation, or whether one thinks otherwisethere are few who mourned Railtrack's passing or who, having looked at the performance of what replaced it over the past few years, would fail to see Network Rail as a significant improvement. That said, I and all right hon. and hon. Members would acknowledge that the experience of rail passengers over recent weeks is intolerable and must never be repeated.
	I listened with interest to the hon. Member for Chipping Barnet (Mrs. Villiers), who spoke for the Opposition, to see what alternative she would offer to Railtrack, alongside the criticisms that she made, many of which I agreed with, some of which I did not. What we heard was no credible alternative. We heard a call for reform and repeated calls for more accountability for Network Rail, but no credible alternative. She was challenged by a number of hon. Members on the Labour Benches to produce such an alternative, but consistently failed to do so.
	To give credit to the right hon. Member for Wokingham, he at least offered an alternative. As I understand it, he offered an alternative that would integrate the operator of the track with the operator of the trains at a regional level. That is at least an alternative, although one may debate whether it is a credible one. However, we did not hear any alternative at all from the Opposition Front-Bench spokeswoman. It would be interesting to see whether we shall hear such an alternative in the time remaining. I would happily give way if an hon. Member on the Opposition Front Bench sought to offer one.

John Pugh: The hon. Gentleman may not be mindful of the fact that Merseyrail Electrics has indeed proposed such an alternative, but it has so far been regarded rather dimly by his Government.

Peter Soulsby: As I have already indicated, I am firmly of the opinion that the arrangements that the Government have put in place for Network Rail are a dramatic improvement on what preceded them and that they have performed very well indeed, despite the lamentable failures of recent months. However, I repeat that we have not heard any alternative to that, to go alongside the criticisms that we heard from those on the Opposition Front Bench.
	Similarly, we heard criticisms from Opposition Front Benchers and others to do with the effect of fare increases on the fare payer, but again, the Opposition signally failed to offer any credible alternative to funding for the railways or investment in them, other than through the fare box or the taxpayer. They suggested that there was indeed such an alternative, but failed to identify it.

Norman Baker: I hope that when the hon. Gentleman reads what I said, he will agree that I set out an alternative and indicated where the money would come from.

Peter Soulsby: Indeed. I recognise that such an alternative was put forward from the Liberal Front Bench; I was referring specifically to those on the Conservative Front Bench, who consistently failed to identify such an alternative, despite being challenged by Labour and Liberal Members. It is the Conservatives' motion that we are debating and it is they whom I criticise for failing to provide any credible alternatives, to go alongside the criticisms that they have levelled.
	In general, Network Rail has delivered. It faces an enormous challenge in meeting the Government's ambitious programme of renewal for our railway infrastructure. We are undoubtedly at a time when rail is again seen as a mode of transport for the future. We were all heartened by the enthusiasm generated by the completion of St. Pancras and the linking of High Speed 1 to the station, as well as by the potential for the benefits of that to be fully exploited. Many of us also feel considerable frustration that the Government cannot as yet commit to further high speed lines throughout the UK, to take advantage of the enthusiasm generated by St. Pancras and the linking of High Speed 1 to it.
	That said, there is now undoubtedly not only a challenge, presented by increased usage of the railways, but a considerable expectation that the improved services will be delivered, that the infrastructure will continue to be improved in order to enable that to happen and that Network Rail is the only credible way of ensuring that that takes place. Network Rail has much to be proud of, in how it has delivered for the passenger and on behalf of the people of Britain, and how it responded to the Government's agenda. However, it undoubtedly also has much to learn from the events of recent weeks. One can only hope that the investigation that the Government have instigated into those events will enable them to learn for the future and to deliver, as I hope we all expect they will do, in the months and years to come.

John Pugh: I want to make a brief contribution. Oddly, I want to put in a small word of praise for Network RailI say oddly, because there are plenty of negatives that I could mention, such as delays and costs on the west coast main line, as well as the lack of interest in Lime Street station, Liverpool's main rail terminus, in the city's capital of culture year. I could also mention the muted support for the Merseyside dock expansion and the unforgivable opposition to the vertical integration of Merseyrail, as well as the extraordinary salaries paid to Network Rail's top executives. I want to park all that and be positive, although not simply because Network Rail is currently spending 6 million on Southport railway station.
	As a former member of the Select Committee on Transport, I recall the demise of Railtrack and the ensuing chaos. For years after that, all we got was retrenchment and battening down the hatches. Anyone who approached Network Rail in those days with a suggestion for rail would get a lecture about bringing down costs and running existing track efficientlyin fact, about mere coping. In those days, a business case for rail expansion was viewed as a contradiction in termsan oxymoron, something best left to the dreams of anoraks. Now, however, as a result of the rail utilisation strategiesI believe I am the first to mention themNetwork Rail has moved. It has done so ever so tentatively, but it has moved, and on to the front foot. It seems to recognise that small-scale improvements and small adjustments to networks can add functionality, capacity and utility to the rail system, bringing with them passengers, profitability and environmental and economic gain. It will probably cost less than the small change from CrossrailI welcome the fact some of my fellow victims from Crossrail are in their places todayand will in all probability deliver huge gains for the region.
	In Lancashire, for example, the rail utilisation strategy revealed desperately poor connectivity between the Preston city region and Merseyside, yet lines from both conurbations arrive in the modest town of Burscough, which has separate stations, unlinked by rail, half a mile apart, severed by Beeching and simply missing a curve. Were this in London, such connectivity would have been delivered decades ago, but because it is in the north-west, it is a struggle to get it done. At least now, however, Network Rail has conceded that there may be a case for such improvements: that is progress, that is new, that is to be applauded. Real applause will follow if the Network Rail, the operators and the transport authorities follow up the words with the money and actually do something.
	I want it put on record that Network Rail is slightly, if tentatively, on the front foot. It is thinking ahead a little and talking of growing the railway, so it is not all bad news.

Nicholas Winterton: I am pleased to contribute briefly to this debate and delighted to follow the hon. Member for Southport (Dr. Pugh), who made a succinct but constructive contribution, based on his knowledge of his area. I commend him and I also wish to pay tribute to my right hon. Friend the Member for Wokingham (Mr. Redwood) who, in a very long but worthwhile speech, made a huge contribution to the debate. He assessed the position of our railways over a number of years and put forward some firm propositions about how to run a more effective railway service than we do now. I happen to agree with my right hon. Friend. I believe that we need to put track and rail together and go back to the regional railways that we used to have before nationalisation. That would create co-ordination and an identity that would dramatically improve the morale of the UK rail network. I also commend my right hon. Friend for the frank way in which he expressed himself, making a very positive contribution to a debate that could easily have been wholly negative and destructive but has turned out to be positive and helpful. I hope that in his reply, the Minister will display the same constructive approach.
	My hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) focused most of his remarks on Rugby because he knows the area well. I happen to know it, too, as I served on the Warwickshire county council for six years and I lived in the area for five years.
	I want to focus my remarks on Macclesfield and I want to take up with the Minister the matter that I raised in my interventionwhether it is appropriate for local services to suffer because of the demand for faster rail services from the major cities and urban areas to London. I asked that question because my own station of Macclesfield is going to suffer. I explained in my intervention that Arriva Trains, which has taken over the cross-country services that were previously run by Virgin Rail, is cutting local services, preventing trains going to Manchester to the north and Birmingham to the south from stopping at Macclesfield because the track is required for the increased number of inter-city trains that will be travelling much faster from Manchester to London. That strategy leaves out certain important profit centres such as Macclesfield.

Norman Baker: The hon. Gentleman makes an interesting and valid point about inter-city services having priority on the railways, but does he acknowledge that not only passenger services but freight services are potentially affected?

Nicholas Winterton: Of course I do. I have always believed that freight should travel by night rather than by day in order to allow more passenger services to use the rail infrastructure during daytime. I hope that the system can be organised to allow freight to travel by night, which I hope answers the hon. Gentleman's question.

Michael Fabricant: Will my hon. Friend give way?

Nicholas Winterton: I am happy to do so, but I do not have a great deal of time.

Michael Fabricant: I believe that my hon. Friend has until 6.30, but I am grateful to him for giving way. He mentioned the west coast main line and the position in Macclesfield, but does he accept that the same thing is happening elsewherein Lichfield, for example, where we are going to have even fewer trains than we enjoy now because of the importance of bringing down vast numbers of people down from Manchester, Liverpool and Glasgow? That should not be happening at the expense of important places such as Lichfield and Macclesfield.

Nicholas Winterton: Of course, I agree with my very good and honourable Friend. He is making the same point as our hon. Friend the Member for Rugby and Kenilworth. Rugby is also going to have fewer services because many more passenger trains are going to sweep through Rugby, sweep through Lichfield, sweep through Nuneaton and sweep through Macclesfield on the way from Manchester to London. That is letting down the people who are based in important profit centres en route and it is not offering the best or best value-for-money use of our rail infrastructure. The Minister must have an influence over these matters. It is no good saying that it is all up to Arriva Trains or Virgin Rail. By the way, I note that Virgin is very unhappy about losing the franchise in the north-west. Personally, I deeply regret that it has, because Virgin was extremely efficient and provided an excellent service.
	Network Rail not only has to provide the signalling and track infrastructure necessary to get trains from A to B and B to C and so forth, as it also has to utilise the available land and ensure, in co-operation with local government, that there is adequate car parking close to or in the proximity of major stations such as that in Macclesfield. I have sought to put Network Rail in touch with the borough council and the county council in Macclesfield in order to treble the parking spaces. If we are to get people out of their cars, as the Government say they want to, not just for long journeys like Macclesfield to London but also for journeys like Macclesfield into Manchester, having more parking spaces will become even more important in the future.
	Both the Government and the city of Manchester want to implement some form of toll or a congestion charge, but if there is no capacity on the railways, how are my constituents going to get to work in Manchester? The bus services are totally inadequate, so the only alternative to the car is the train, but if the trains are not running as a result of reduced services, all I can say is that it shows how the Government are not joined up at all. They are trying to achieve objectives, but in the process, they are dramatically undermining the ability to change travelling behaviour and get more people onto public transport. In my area of Cheshire, east Cheshire and Macclesfield, public transport is inadequate. Reducing the number of local trains will create even further difficulties.
	I shall be meeting the managing director of Arriva Trains in the next 10 days, so I hope that the Minister will take this issue seriously and not send another reply to my letters, saying merely that the fast trains are going to get the automatic right to the track and that local trains will be treated akin to second-class citizens. That is not the way to operate. Will the Minister take this matter seriously?
	Rail can answer, in a major way, some of the problems of getting to and from work, but unless we have the necessary number of trains and the necessary capacity on the track and on individual trainswhich means longer platforms and more carriages on each trainwe shall not be able to achieve the Government's objectives in respect of climate change and carbon dioxide emissions.
	I feel terribly strongly about this. I sometimes travel down by train, although I do not always do so, and I do not share the dislike of carsalmost a phobiafelt by the hon. Member for Lewes (Norman Baker). People in this country demand mobility, and cars can give it to them. In the countryside, by the way, 4 x 4 vehicles are necessary.
	I ask the Minister please to respond to the genuine concern that is expressed about the way in which our rail services are organised. In an era in which the Prime Minister says that he wants a Government of all the talents, I am only surprised that he has not asked my right hon. Friend the Member for Wokingham to advise him on rail structure; but I really do want a constructive reply from the Minister. He is a decent guy and I like him. Can he come up with the answer to what has been asked in this debate?

Stephen Hammond: We have had an excellent debate. The stimulus for it was, of course, the overruns in track maintenance and disruption to thousands on the west coast main line and at Liverpool Street, but inevitably the speeches covered wider issues.
	My hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright), in his lawyer-like manner, presented an excellent forensic analysis of the problems that have confronted his constituents. It was thought provoking and extremely well argued. We were also fortunate enough to hear from my right hon. Friend the Member for Wokingham (Mr. Redwood), who, in a truly memorable speech, gave a history lesson reminding us that British Rail was not the paragon of virtue that some seek to remember, and that nationalisation is no model for the running of a railway. He also reminded us of something that some may wish to forget: that the right hon. Member for Kingston upon Hull, East (Mr. Prescott) praised privatisation for increasing passenger traffic. My right hon. Friend was, of course, right to point out the Network Rail is the creation of this Government. At the heart of his reasoningwhich is why it was so correctwas the fact that Network Rail has 18 billion of debt guaranteed by the Government, and relies on the Government for its revenue subsidy.
	We also heard a well-argued and thought-provoking plea from my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) that his constituents should not be left behind in the development of high-speed services that might be introduced when the route from London to Manchester is speeded up.
	Along with others, I welcome the hon. Member for Lewes (Norman Baker) to his new role as Liberal Democrat spokesman. I was interested when the hon. Member for South Thanet (Dr. Ladyman) described his speech as good. We always feel worried when that is said in case the next words are and original, and we are told that the good bits were not original and the original bits were not good.
	The only part of the speech from the hon. Member for Lewes with which I strongly agreed was the part in which he said that the Government had not focused on capacity. The speech from his colleague, the hon. Member for Southport (Dr. Pugh), was succinct and positive. I wondered whether the positive element was caused by the fact that so much was being spent on capacity improvements at Southport, but I am sure it would be ungenerous of me to suggest that that was the only cause.
	We heard an interesting speech from the hon. Member for North Ayrshire and Arran (Ms Clark), who is not present now. She was honest enough to state that she favoured public ownershipnot a sentiment that will necessarily endear her to those on her Front Bench or, indeed, guarantee her promotion. The hon. Member for Llanelli (Nia Griffith), who also seems to have disappeared, spoke of the lack of Sunday and holiday services. The hon. Member for Leicester, South (Sir Peter Soulsby), who is present, expressed some disappointment with Network Rail, but complained that he had heard no alternative suggested from the Conservative Front Bench. I cannot remember too many alternatives coming from the Front Bench of his party when it was in opposition, but I can give him the glad tidings that we are undertaking a rail review. We are taking our time over it, and coming up with measured, costed proposals that he will be able to see later this year.
	The expansion of the debate beyond the issue of overruns is hardly surprising. Members recognise that the problems with Network Rail run far deeper than the shambles that we saw over the new year. The motion calls on the Government to take steps to make Network Rail more accountable and efficient, and that is only right. Even this not me, guv Government must accept that they created Network Rail, and that if Network Rail is failing they must correct it and take some responsibility.
	On 19 December, Passenger Focus expressed disappointment at Network Rail's indication that there would be overruns during the new year period. Before Christmas, Virgin Trains asked the Office of Rail Regulation to take enforcement action against the likely disruption over that period. In other words, the problems on the west coast main line and Liverpool Street did not come out of the blue; they were anticipated and expected. The question to which we have failed to receive any answer, and which must be answered by the Office of Rail Regulation inquiry, is Why did Network Rail not act at that stage? Why did it not reschedule lesser works so that thousands of people would not be disrupted and uncompensated?
	Time after time this afternoon we heard the Secretary of State say that we must wait for the review. The Government must accept that, in letters to Members, the management of Network Rail has already accepted a large part of the blame. One of the questions that the Minister might wish to answer is When did the Secretary of State know of the likely problems? Did she know before Christmas, and did she speak to Mr. Coucher then? If she did notgiven the clear statement by Passenger Focus and others that there would be problems over the new yearshe has been negligent.
	As we all know, what actually happened was exactly what had been predicted: work on the west coast main line was not finished on time. For commuters in the constituency of my hon. Friend the Member for Rugby and Kenilworth, however, that is not news. During the current financial year alone, they have experienced 150,000 hours of delay. Perhaps the Minister will answer the question that the Secretary of State chose not to answer: do the Government still believe that the west coast main line upgrade will be delivered by December 2008, and if not, when do they expect it to be delivered?
	Liverpool Street station was shut on 2 January following the overrun of a 10-day engineering project to replace a bridge. Andy Chivers, managing director of the National Express One franchise, rightly described that as a major failure. He also declared that Network Rail had not delivered on assurances that it had given him before Christmas. The Minister might care to address the following questions. Why could Network Rail not predict the likely problems at Liverpool Street? If it did predict them, whom did it tell and what did the Department do about it? This was a failure of project management systems. Who was in charge? When did Mr. Coucher tell the Department? When did Mr. Coucher know, and when did Mr. Henderson, the engineering director, know? Whom did he tell, and when? When did the Secretary of State know, and what action did she take? The short answer to the second part of that question must be none.
	If this were an isolated incident, we would be disappointed. We would be asking, as Passenger Focus has, Where is the compensation for the passenger? and Has the industry understood the problems? If it were an isolated incident, however, we would not be having this debate. The trouble is that for all the comments about learning lessons, it was not an isolated incident. Even as we stand here today, there are Network Rail overruns in Scotland. There are systemic problems with Network Rail that need to be addressed: its efficiency, its accountability, its priorities and the way in which it delivers services to passengers.
	What happened over the new year in 2008 was certainly not an isolated incident. The Government disbanded Railtrack, created and then disbanded the Strategic Rail Authority, and then created Network Rail. We were led to believe in a brave new world created by the Government: never again would there be an incident, never again would there be overruns, and never again would there be accidents. What nonsense! Network Rail has had a history of overruns and accidents. In the last two years alone, its record reads like a catalogue of mismanagement, inefficiency and incompetence. In March 2006 it was fined for failing to provide proper information to other TOCs. In September to October 2006 there were derailments at Waterloo, where the rail accident investigation branch catalogued a failure of reporting and fault management systems and supervision errors, and at Greyrigg. In March 2007, it was fined for overruns at Paddington.
	In July 2007, Network Rail was fined 2.5 million for failing to complete re-signalling at Portsmouth. At that point, the ORR concluded that Network Rail had failed adequately to evaluate and mitigate the risks associated with the project. That might sound rather familiar to constituents of my hon. Friend the Member for Rugby and Kenilworth, for that appears to be exactly what happened there over the new year. Far from learning any lessons, Network Rail seems to have failed to address those lessons.
	Mr. Coucherfollowing the lead of the Government, who seem to say, It's not our fault, it is always someone else'shas sought to blame his contractors. This is feeble at best and disingenuous at worst. It is feeble because these projects have long lead times, contractors need to procure supplies and TOCs need up to 15 months' notice. If that were so, the question we should be asking is whether the complete scheme was identified on time and agreed, and what interaction Network Rail was having with its contractors.
	It is feeble to blame the contractors, partly because only a bad workman blames his tools. It also implies a complete failure of oversight, of management supervision and of management. The accident report for Waterloo shows that failures have happened whether functions have been taken in-house or not.

Norman Baker: The hon. Gentleman has found Network Rail guilty as charged and there are certainly other issues with which it could be charged. However, I am not quite clear what the sentence is. What is the hon. Gentleman's remedy to deal with this matter?

Nicholas Winterton: Cut the bonuses.

Stephen Hammond: I am just coming to that point, but I agree with my hon. Friend the Member for Macclesfield. Network Rail is not properly accountable and it needs to be made so, but do not take our word for it. This morning, one could have read Tom Winsor's remark that
	Network Rail is a company supposedly answerable to its stakeholders...they have no power.
	Lord Berkeley, a Labour peer, said:
	I think it would be helpful to Network Rail and all the people that use the network if there were greater accountability.
	Network Rail's structure ensures that it is accountable only to itself. My hon. Friend the Member for Chipping Barnet has already highlighted the problem of fines and has said that she believes that the ORR might require extra powers. She is right.
	Where else should accountability for Network Rail lie? Should it lie with the non-executives, who awarded themselves a pay rise of 18 per cent. on average last year and are supposed to be holding the executive body to account? In yesteryear, the then, and hopefully soon to be again, Labour Opposition used to lecture us about fat cats. At least those privatised companies delivered. In the world of new Labour, a failure to speak out or to provide accountability earns people a self-awarded 18 per cent. pay increase. Causing disruption to thousands of people earns the chief executive a 466,000 salary and 76,000 in bonus.
	The short answer is that Network Rail is not a private sector company but a public sector one. This Government created Network Rail. The Secretary of State today has sought to hide behind the ORR. It is typical of an exhausted Government, clamouring for any credit they can find but shirking any responsibility. The Secretary of State failed to answer the key questions today. When did she know? What action did she take? Increasingly, she is a Secretary of State out of touch with the needs of the travelling public. Network Rail is in danger of hitting the buffers.
	If, after the new year chaos, the travelling public and the TOCs view Network Rail as not fit for purpose, that is equally so of the Government and the Secretary of State. The Government have a responsibility to ensure that Network Rail works. It is a failure: the failure of the Government. The travelling public, who suffered fare increases of up to 14 percent and often travel in sub-human overcrowded trains, deserve and have a right to expect better.

Tom Harris: This has been a very good-humoured debateat least the middle of it was; the beginning and end have been less so.
	I will come back to my prepared comments, because first I want to make it clear that mistakes have been made and Network Rail has issued an apology. Passengers have paid the price for the mistakes made and that is unacceptable, as both sides of the House accept. The hon. Member for Wimbledon (Stephen Hammond) has said that Network Rail is a failing company. That speaks more to his wishful thinking than to the facts. Nothing would please the Conservative party more than to have Network Rail painted as the same basket case as Railtrack. It is simply not the case.
	 [Official Report, 23 January 2008; Vol. 470, c. 16MC.]
	Network Rail came to the rescue of Railtrack. When Railtrack was drowning in its own inefficiencies, and costs for the updating of the west coast main line had gone to above 20 billion with no prospect of the project finishing, it was Network Rail that came in and rescued the project, which is now delivering at a cost of 8 billion. It was Network Rail that helped push performance up by more than 10 per cent. as measured by the industry standard public performance measure. It is the outstanding engineering experience of Network Rail that is leading renewal and expansion of the rail network at Birmingham New Street, at Reading, on the west coast main line and through Thameslink.
	My hon. Friend the Member for North Ayrshire and Arran (Ms Clark) spoke about her concerns about the involvement of private industry. I do not agree with her. I do not think that the involvement of the private sector in the rail industry is a bad thing. I think that it has brought innovation and efficiencies to the rail industry. She is a solid supporter of the railways and I take seriously what she says. However, in some areas we will have to disagree. I do agree with her that passengers must get the best possible service. I have said on a number of occasions that the railways are not run for politicians or for the industry itself; they are run for passengers.
	The hon. Member for Rugby and Kenilworth (Jeremy Wright), in a positive and emollient speech, asked Ministers to address Network Rail's failings. He might be interested to know that, on 12 November last year, the hon. Member for Chipping Barnet (Mrs. Villiers) told  The Daily Telegraph:
	The fat controller is still there in Whitehall
	of all the ministerial team, I think she was probably referring to me. She continued:
	It is a real concern that Ruth Kelly (the Transport Secretary) has more control over the industry than the days when people were eating British Rail pork pies.
	If that is a genuine concern of the Opposition Front Bench, the hon. Gentleman has to accept that that comment was made in a pejorative sense. Presumably the hon. Lady does not believe that Government involvement in the industry is a good thing, yet here we have the transport Whip, the hon. Member for Rugby and Kenilworth, telling Ministers that they must micro-manage Network Rail.

Jeremy Wright: Will the Under-Secretary give way?

Tom Harris: I am sorry but I am not giving way, because I have a limited amount of time.
	The hon. Member for Rugby and Kenilworth made some other comments about services to his constituency. He might be interested to know that, at Rugby, there will be a trebling of services from Rugby to Birmingham, Coventry and Northampton. There will be an accelerated service to London, and a new semi-fast service to Crewe giving new connections to Liverpool, Manchester and Preston. There will be a major increase in capacity in all Rugby services. The upgrade of the west coast main line will be good news for all his constituents.
	My hon. Friend the Member for Llanelli (Nia Griffith) talked about Sunday services and she is right; we want to move to a seven-day service. The right hon. Member for Wokingham (Mr. Redwood) gave a speech that I thoroughly enjoyed. There were some things he said with which I agreed; I will not go into the detail at the moment. However, he has the dubious distinction of being Railtrack's last and proudest defender. He said that there was no difference between Network Rail and Railtrack but that he generally prefers Railtrack. It says something about the self-delusion of members of the Conservative Cabinet at that time that even now, after what has happened to Railtrack, they still believe that Railtrack was not an ignominious failure.
	My hon. Friend the Member for Leicester, South (Sir Peter Soulsby) talked about high-speed lines. He has mentioned the issue before, and he knows that it is still under review by the Government, and we will make further announcements on it in years to come.
	The hon. Member for Southport (Dr. Pugh) made some praiseworthy remarks about Network Rail. They were, I felt, less than enthusiastic, but he was welcoming of the utilisation strategies produced by it.
	The hon. Member for Macclesfield (Sir Nicholas Winterton) talked about the need for car parking at Macclesfield. He also talked about the Government seeking modal shift in respect of the importance of getting people out of their cars and on to the railways. He can search the Library and the online version of  Hansard as much as he likes, but he will not find any comment by me encouragingor dictating topeople to get out of their cars. It is the Government's intention to provide people with informed choices, and to allow them to make decisions about which modes to use. The fact that 40 per cent. more people are using the railways today than 10 years ago says a great deal about the stewardship of the railways under this Government.
	I agree with something that the hon. Member for Chipping Barnet said. There would indeed be fewer network rail possession overruns under a Conservative Government, and that would be for one very obvious reason: there would be far fewer engineering works. The west coast main line upgrade, Thameslink, Crossrail, Reading, Birmingham New Streetfunding for all those projects, which are so vital for the expansion of the railway, simply would not be guaranteed under a Conservative Government.
	The Conservatives always like to dispute Labour claims that they are planning to cut public expenditure. When it comes to the railways, however, we already have a cast-iron guarantee that investment would be reduced, and reduced significantly. The hon. Member for Chipping Barnet stated on her own website:
	The worrying thing is that the franchise payments the government has agreed with rail companies mean these increases are likely to continue well into the future.
	On 17 July, she stated in the Housewrongly, of coursethat the Department for Transport set the franchise payments for the train operating companies and that those payments were solely responsible for increased fares. There we have Tory transport policy to date: train companies do not like paying premiums. I wonder how the hon. Lady came to that conclusionperhaps she commissioned research from the university of the blindingly obvious? Of course they would prefer not to pay premiums, but if a train operating company is making large profits on a franchise given to it by the Government, why should not some of the profits go back into the transport budget? That is what is happening. However, like her predecessor on the Front Bench, the hon. Member for Epsom and Ewell (Chris Grayling), the hon. Lady wants TOCs to be given subsidy only from the public purse, regardless of how profitable a franchise might be. The disappearance of those premiums would present a net loss to the rail budget, so where would the cuts fall?
	Let us turn to the Opposition motion, which states that Network Rail should be held more accountablemore accountable than what? Should it be more accountable than its predecessor, Railtrack, perhaps? How accountable was that organisation, set up by a failing Tory Government to oversee the decline of the railwaysan organisation whose first priority was not maintaining the railways in a safe manner, but providing dividends to its shareholders? The hon. Lady waxes lyrical about the injustices of poor TOCs having to pay some of the profits back into the rail budget, but I have yet to hear her complain about Railtrack shareholders receiving their dividends while track maintenance was ignored and lives were put at risk.
	How should Network Rail be held more accountable, according to the hon. Lady? That point was ably made by my hon. Friend the Member for Leicester, South. Her remarks earlier today shed no light on the matter. It was up to Eddie Mair on the BBC Radio 4 PM programme last week to elicit some details, and we are all grateful to him for that. Eddie Mair asked, How would you fix what you clearly believe are structural problems in the railways? The hon. Lady replied, Well, we're looking at a range of options to ensure that Network Rail does become more accountable to its customers. Eddie Mair then asked, What are the options for making Network Rail more accountable? The hon. Lady said, Well, we're looking at a range of options at the moment. We're carrying out a rail review, which we will be publishing shortly. Eddie Mair's next question was, But can you give us no further ideas? The hon. Lady responded, There are a range of options we are looking at, but I can't give you details as yet, but they will be published shortly.
	The hon. Member for Wimbledon said in his summing up that the Conservative rail policy will be published later this year. I think he also said the same thing last yearhe said then that it would be published later in the year. So, that is clear then: the Conservative party regrets to announce the late arrival of its railways policy and any inconvenience that that may cause.
	We have an expanding railway. We have record passenger numbers totalling more than 1 billion in the past three years. We have cheaper regulated fares in this country than we had 10 years ago. We have the youngest train fleet in Europe. For the first time in 50 years, we have a Government who are actually able to plan for expansion in our railways. A Conservative party which created Railtrack and starved the rail industry of vital investment is in no position to give lessons to this Government.
	 Question put, That the original words stand part of the Question:
	 The House proceeded to a Division.

Mr. Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 235, Noes 303.

Question accordingly negatived.
	 Question, That the proposed words be there added,  put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):
	 The House divided: Ayes 304, Noes 234.

Question accordingly agreed to.
	Mr. Deputy Speaker  forthwith declared the main Question, as amended, to be agreed to.
	 Resolved,
	That this House applauds the Government for taking decisive action to correct the flaws of rail privatisation; welcomes the fact that the railway is carrying 40 per cent. more passengers and 47 per cent. more freight than in 1997 with improving punctuality and safety standards and record investment in infrastructure; and looks forward to seeing the results of the investigation by the Office of Rail Regulation into Network Rail's performance, following the unacceptable engineering overruns experienced by passengers during Christmas and the New Year.

Higher Education

Mr. Deputy Speaker: We now come to the debate on higher education and adult learners. I have to announce that Mr. Speaker has selected the amendment in the name of the Prime Minister. I remind the House that there will be a 10-minute limit on Back-Bench contributions to the debate.

David Willetts: I beg to move,
	That this House is concerned that the Government's decision to withdraw funding from institutions for equivalent or lower qualification students will have a disproportionate impact on the part-time sector in general and on specific institutions such as Birkbeck and the Open University; and urges the Government to consider ways in which it can minimise the damage this measure will do to lifelong learning and the delivery of the Leitch agenda objectives.
	Although that is the motion, it is really early-day motion 317, which is a cross-party motion tabled by the two Members who represent Milton Keynes, where the Open university is situatedmy hon. Friend the Member for North-East Milton Keynes (Mr. Lancaster) and the hon. Member for Milton Keynes, South-West (Dr. Starkey). That early-day motion has collected more signatures than any other motion before the House. The official Opposition are simply a modest vehicle to ensure that the House has an opportunity to debate and vote on that excellent motion. The Prime Minister has claimed that he believes in radical constitutional reform, but I doubt that even he envisaged anything as radical as a non-partisan Opposition day debate on a cross-party motion. Let us see how we get on.
	First, let me help the Secretary of State with a little problem that I think he has recognised. It seems that his amendment to our motion is seriously defective and is not an accurate account of the Government's policy. I hope that he will correct the record, either now or during his speech, and amend his amendment so that it gives a more accurate account of his Government's policy. If we cannot rely on the Government to table an amendment that is an accurate account of their policy, we should not be surprised that they got into such a muddle.

Tim Boswell: Has my hon. Friend noticed that the second objective of the Secretary of State's new Department is to:
	Improve the skills of the population throughout their working lives?
	Without prejudice to my hon. Friend's speech, does he not think that it would have been helpful if, instead of bringing forward these measures, the Secretary of State had deferred consideration until after the comprehensive review of student support in 2009, which is only next year, and had then consulted on its conclusions?

David Willetts: I totally agree with that excellent intervention, which was based on the excellent early-day motion. There has been such support for that early-day motion because of the enormous respect on both sides of the House for the work done by the Open university, Birkbeck college and other institutions across the country in providing educational opportunities to mature part-time students, and especially to women, giving people a second chance in life regardless of what they have studied in the past.

Robert Key: Does my hon. Friend not think it odd that, at a time when the Government are increasingly saying that the faith communities are important, the new regulations will impinge on the training of priests, imams and rabbis? In the Church of England alone they will add at least 500,000 to the cost of training priests.

David Willetts: My hon. Friend is right. Many people who share his concern about education will have received a host of representations from a variety of professions that often recruit and train people who have already done a degree in a different subject. I think that some 75 per cent. of ordinands in the Church of England study theology after they have studied a separate degree. Those are exactly the groups that will be affected by the proposal.
	Harold Wilson famously believed that the Open university was one of his greatest achievements. Some on this side of the House might say that it was one of his few achievements. Nevertheless, it was a Labour creation. That might be one reason that we welcome so many Labour Members to the debate. The Prime Minister is proud of having taught at the Open university. We ask all hon. Members, especially Labour Members, to be true to the principles of their party and its historic achievements, and to be true to themselves by voting for a motion that many of them have already signed up to.
	Of course, although the debate will focus on the Open university and Birkbeck college, the decision has a much wider application. The Government are proposing that students who already have a degree qualification should not receive any support if they return to university. We are talking not about grants or loans, as the regime governing them is already much tougher for returning students, but about the removal of Higher Education Funding Council teaching support for any university that takes on returning students. For the first time, home students on approved courses at English universities will not get even a contribution towards teaching costs. They will be treated as though they were from China.
	That is an unprecedented shift in the pattern of higher education financing. I believe that such a decision should have been taken only after a serious review of its implications, and that it should have been considered alongside all the other issues connected with the future of university fees that legislation already requires us to look at in 2009.

Gordon Marsden: The hon. Gentleman mentioned the 2009 settlement, but the proposal under discussion is part of the existing settlement. Will he share with the House how he would substitute for the 100 million that the proposal will produce, given that his party's record on higher education funding before 1997 was so abysmal?

David Willetts: My argument is very simple. It is that the Government's decision should be sent for review, and perhaps considered as part of the 2009 review of fees. The HEFC budget amounts to 7.5 billion, and the Government have no reason to impose a cut worth only 100 million.

Kelvin Hopkins: Would it not be more honest to say that the motion is fine but that taxes must be raised to pay for it?

David Willetts: We are talking about an HEFC budget of 7.5 billion. For reasons that have left most people baffled and confused, the Government have decided to take 100 million away from mature students who already have a degree qualification and to use that money for some other, unspecified, purpose. We believe that that decision should be reviewed.

David Chaytor: The purpose is not unspecified, as the money will be used to help those mature students who do not have a recognised qualification.

David Willetts: The Government's decision was announced last September. The relevant brief from the HEFCthe Government's own quangowas last updated on 11 December. It takes the form of questions and answers, and one question was how the Department for Innovation, Universities and Skills intended to use the money saved from withdrawing funding for ELQsthat is, students with equivalent or lower qualifications. The response was:
	The Secretary of State has confirmed that any savings made from withdrawing funding for ELQs will be available for HEFC to redistribute according to agreed priorities yet to be decided.
	That was two and a half months after the reduction was announced, and yet the agreed priorities were yet to be decided. It seems to me that the decision was taken in haste, and that we are in danger of having to repent at leisure.
	The Government argue that people with a degree who return to study must be hit so that new students can be helped. Of course, the Opposition want more new students to participate in higher education, but the Government's argument rests on a false dichotomy. The Government often cite the Leitch report but, as has been noted already, that deals with lifelong learning, which is about both reskilling and upskilling. To say that we must penalise people who are reskilling to make available money for new students who are upskilling is to fail completely to understand what the Leitch agenda of lifelong learning is all about.
	Labour Members may not want to take my word on that, so perhaps I should quote what the Prime Minister said in a speech on this subject in May 2006. Talking about his approach to lifelong education, he said that it should be recurrent, permanent and on offer to anyone at any time. We are simply trying to hold the Government to account over a statement that the Prime Minister made about his approach to the matter. He made a commitment that all adults
	should have access to training and vocational opportunities throughout their working lives.
	We believe that that commitment clearly matters to the Prime Minister. It matters to the many Labour Members who have signed the early-day motion, and it is a commitment that the House should reflect in the vote to be taken later tonight.
	However, instead of that vision of lifelong learning, we now have what has been called the measles theory of educationget it once, get it early and try never to have it again. That is not the right approach, and it is a real barrier to people trying to change jobs, shift careers and move forward. I shall give the House some examples of those who will lose as a result of the Government's approach.
	Among the losers would be a person who had studied medicine at university and would now like to study cognitive therapy. I saw that the Secretary of State for Health was here briefly a little earlier. He has launched an initiative to try to ensure that there is more access to cognitive therapy on the NHS. However, people who already have a medical degree and who wish to study cognitive therapy and deliver the Government's objectives will be penalised by the policy under discussion this evening.
	In addition, a person who wants to do a post-graduate certificate in education will get funding, but someone who wants to get a qualification to teach in the FE sector will not, even though the Government are supposed to value the FE sector and to want to see it expanded. Moreover, a person with an engineering degree who wants to use his expertise in business and to study for an MBA will not be funded, even though we are supposed to want to encourage innovation and enterprise in this country.
	Another loser would be a woman with a degree in French who may have taken time out of the labour market to raise children. If she now wanted to do a higher education IT courseit does not even have to be at a universityshe would not get any support from the HEFC. Let us be clear: some of the biggest losers as a result of the Government's policy will be women who want to return to the labour market after a long period away.

Nigel Evans: Does my hon. Friend agree that the policy is a false economy? The people who would benefit from being able to acquire another qualification of degree equivalent or lower would be an asset to this country, as they would be able to get another job that paid more money. That would mean that they would pay more in tax, but the Government appear to be turning their backs on such people.

David Willetts: My hon. Friend is right. We are talking about the importance of spreading opportunity in this countrysomething that I thought all hon. Members would support. I am sure that hon. Members of all parties will have seen the many representations that we have received, but I shall quote the submission on women returners from the university of London union, a body of which I believe the Minister for Lifelong Learning, Further and Higher Education was at one time general manager. The union said today:
	There is a real danger that the proposed cuts would particularly disadvantage those who have taken a career break to care for children or elderly relatives.
	I am sure that Labour Members are hearing the same warning, and it is something that the Government desperately need to address.

Phil Willis: I am fascinated by the even-handed approach that the hon. Gentleman is adopting, but will he clarify Conservative policy on these matters? Under his party's proposals, would anyoneanyonewith a level 4 qualification be entitled to ELQ training?

David Willetts: We believe that the current regime should be retained, pending a review of the Government's proposal. We should be happy for such a review to be held, and indeed the relevant legislation on higher education finances makes it clear that the fee regime should be reviewed in 2009. I believe that the Select Committee on Innovation, Universities and Skills, which the hon. Gentleman chairs, is considering the matter, and I look forward to its report.
	The Government announced their decision on this matter with no consultation. That caused much shock and unhappiness in the HE sector, so suspending the decision and retaining the current regime would allow an appropriate consultation processincluding a review exercise by the Select Committeeto take place. That would be the common-sense approach, and it is what the early-day motion that has been signed by 86 Labour Members calls for.

Brian Iddon: The Select Committee of which I am a member is indeed holding a quick inquiry into this subject. I just ask the hon. Gentleman why he was not prepared to wait until the Select Committee report was published. Furthermore, will he encourage some Conservative members to attend the Committee? We have seen very few of them so far.

David Willetts: My hon. Friends are so assiduous in so many functions around the House that if by chance they are unable to attend that Committee, I am sure it is because they are hard at work in another Committee somewhere else in the House.
	I hope that we will have a further debate in this Chamber when the Select Committee has produced its report. That will be excellent, and I very much look forward to it. It would be sensible, when we have that type of inquiry under way, not to take any decision until after the consultation. It would be absurd for the Government to announce a decision with no consultation and then, sadly, for the consultation to happen afterwards.

Rob Marris: Will the hon. Gentleman give way?

David Willetts: I will give way, and then I must make some progress. I know that a lot of people want to speak.

Rob Marris: I am grateful to the hon. Gentleman for his usual generosity. Is his priority for state support for higher education first-time students or second-time students?

David Willetts: This is the false dilemma that has got the Government into such a muddle. Large numbers of British citizens historically had a right to go to university and study on approved courses, without any grants or loans but at least with HEFC support for their teaching costs. The decision that, for the first time in the history of British higher education, a group of people should not receive finance even for their teaching costs because they have a first degree is a significant one. I personally think that many such people are deserving. Many of them are women wishing to return to work. Many of them are trying to enhance their skills or change their career. It is wrong to say that the only way in which we can help a new student is by penalising a group who have benefited not only themselves but, as my hon. Friend the Member for Ribble Valley (Mr. Evans) said, the wider society and economy by returning to university.
	The Government say, Don't worry. It's all going to be fine because many returners will be financed by their employer. But often one of the main reasons that people study is that they wish to change their career and their employer. In fact, one of the things that Birkbeck, the Open university and other institutions say is that sometimes they have students who do not wish their employer to know that they are studying because it is a prelude to changing the direction of their career. So the idea that someone can go to their employer and say, I have decided that I want to leave my current employment and do something totally different. By the way, the Government have just slapped an extra charge on me. Would you mind contributing to my studies? is fanciful. It is not just us who are saying this; we are simply speaking on behalf of the experts and institutions affected across the country.
	On this occasion, the point has been made clearly by the director general of the Confederation of British Industry. He said:
	No doubt there will be real interest in the possibilities of cofunding now being developed by the Government. ... But they are not going to step up to the plate just because the public purse is too constrained and because students can't afford to pay more either.
	He went on to describe the Government's policy as
	Something of a leap in the dark.
	So employers are not saying that they will be willing to finance courses, because the people who want to do a second degree are often people who are trying to change the direction of their life. Many of them come specifically to London because they want to embark on a new career. It is why so many of the institutions that will be most severely affected are in London and why it is a great pleasure to see my hon. Friend the Member for Henley (Mr. Johnson) here in the Chamber. I suspect that this may be something that he wishes to touch on if he succeeds in catching your eye, Mr. Deputy Speaker.
	So the policy affects London; it affects women returning to work; but above all it affects part-time students. In fact, 20 per cent. of part-time students will be hit by the Government's proposal as against perhaps 2 per cent. of full-time students. This proposal thus has a 10 times greater effect on part-time students.
	Again, in trying to continue in the spirit of cross-party openness on this issue, we have to recognise on both sides of the House that we have given part-time students a raw deal. We have not cracked the challenge of how we improve the deal, given the amount of money involved, but we all know that part-time students have a raw deal compared with full-time students. That seems to be a shared analysis.

Tony Baldry: The policy affects London and it affects England, but it is yet another instance of a policy that does not affect Scotland. Yet we will doubtless see the Government dragoon Scottish Labour Members of Parliament through the Lobby in support of a policy that is simply bad news for England.

David Willetts: My hon. Friend raises another important aspect of this tangled debate. I am trying to keep it simple. It seems to me very simple indeed. There is an excellent early-day motion; it has been signed by more Members than any other. It is a cross-party motion brought before the House by two hon. Members in opposite parties. It has been signed by hon. Members from all parties. We would simply like the House to vote for it tonight. That seems to be the right approach. I hope that, as we consider that vote, in the remaining hours of debate we will hear more about some of the groups who will be affected.
	I have mentioned the Church. I have received a letter from Relate. Many marriage guidance counsellors trained for marriage guidance having previously obtained a degree. Relate estimates that 70 per cent. of the people it trains have a previous degree and that withdrawal of funding would reduce the institute's funding by a quarter. Did the Secretary of State for Innovation, Universities and Skills realise that he was doing that to the finances of Relate when he launched his policy without consultation? I very much doubt it. Did he know what he was going to do to pharmacists? Has he seen the letter from the Council of University Heads of Pharmacy, which says that universities train as pharmacists people who have a previous university degree and that his proposal would have a major impact on students studying for the Master of Pharmacy degree and seriously undermine the School of Pharmacy and other schools of pharmacy across the country? Was the Secretary of State aware of that when he took this decision? What were the Government up to?
	I hope that tonight we will get a significant change of position from the Government, but I hope that the concessions they announce will be properly consideredbetter considered than the policy. The Secretary of State may come to the Chamber now and announce more exemptions, but I do not like the game of exempting some subjects but not others and making invidious decisions that some courses are desirable and others are not. This is a fundamental change in the way in which higher education is financed in this country and it should be reviewed as a whole.
	The Secretary of State may offer support for particular institutions. He will know of course of the powerful feeling on both sides of the House about the Open university and Birkbeck, but some cobbled together package to help with the transitional costs of one or two institutions would fail to rise to the nature of the problem that he has created. Perhaps I can quote from a letter to  The Guardian from the president of the National Union of Students and 27 others on 21 November. It states:
	The Funding Council's consultation is restricted to implementation, but broadening exemptions won't solve the problems. With no public consultation on the principle, no evidence base on the outcome and a real danger of damage to the lifelong-learning agenda, the sensible way forward is for Ministers to defer implementation in 2008 and refer this policy to the 2009 Fees Commission for the proper scrutiny which it deserves.
	That view, which is the view of many people in the world of higher education, seems right. It is what the Government should do. That is what we are calling for, and I believe that that review should tackle the fundamental issue that many of us on both sides of the House care about.
	We do not want to live in a country where, if at first you don't succeed, you don't succeed. We want people to have a second chance. We want people to have new opportunities. We do not want to live in a country where people endlessly ask, Where did you come from? What did you study? We want to live in a country where what matters is what one can do in the future, not where someone came from. We do not want to say, Well, sorry, you did a geography degree 20 years ago. We can't help you. That is not the kind of higher education system that we want. I do not believe that it is the kind of higher education system that Labour Members want. I therefore call on hon. Members on both sides to support our motion tonight.

John Denham: I beg to move, To leave out from House to the end of the Question, and to add instead thereof:
	'supports the Government's decision to reprioritise some funding currently supporting the teaching of higher education students who already hold an equivalent or higher qualification, in order to enable approximately 20,000 additional full-time equivalent students to enter higher education for the first time; notes the Higher Education Funding Council for England (HEFCE) consultation which proposes that transitional protection will be put into place to ensure that no provider loses in cash terms, that the change to the funding methodology will protect Foundation Degrees, employer co-financed programmes, and strategic subjects, and that the premium paid to support the costs of part-time provision will be increased; notes that HEFCE and Ministers have been engaging constructively with the Open University and Birkbeck on this issue; and believes that the Government is right to give priority to first-time students.'.
	Before I begin my response, I should like, with permission, to point out to the House an error in the Government's amendment on the Order Papera matter on which I wrote to Mr. Speaker earlier today and indeed to the hon. Member for Havant (Mr. Willetts). The phrase equivalent or lower qualification should of course be equivalent or higher qualification. Therefore, the amendment that the Government are moving is in the revised form. I apologise to the House for any confusion caused.
	I welcome the debate. It is a subject that has generated a great deal of heat, if not a great deal of light in recent weeks. Tonight, the hon. Gentleman has done his best to add to the heat, without having added any useful light. The House will have noticed that although he tried to give the impression that he opposes the principle of what the Government are proposing, he failed to oppose it. There is a degree of opportunism behind that, which is unfortunate.
	The reality is that the principle behind the proposal was announced in September. Since then, the Higher Education Funding Council for England has carried out a consultation, which was completed on, I think, 7 December. Ministers expect to receive advice from HEFCE on the proposals in the near future. I cannot anticipate the results of that, but clearly there has been a consultation. Those with an interest, and the universities, institutions and courses mentioned in tonight's debate, have had the opportunity to respond to that consultation.

David Howarth: I notice that the Secretary of State starts the story in September. May I ask him to start a little earlier than that? Will he explain to the House what options were before him and Professor Eastwood, and why the option that we are discussing was put on the table, especially given the entire lack of consultation with institutions before that point?

John Denham: I think that I will deal with those points in the course of my speech. I want to set out the reasons behind the Government's proposals, and the practical considerations that we need to take into account. I understand that genuine concerns on the subject have been raised by right hon. and hon. Members of my own party. I believe that my hon. Friends' concerns are misplaced, but I recognise that they reflect the Labour party's historical commitment to universities, including the Open university and Birkbeck, and its broader commitment to lifelong learning. I share those values. As I recently told Open university staff,
	Over the last 36 years, the Open University has been a key driver of change in...higher education.
	The OU
	has allowed over 2 million people to graduate, most of whom would never otherwise have had a higher education.
	That is not a bad record for a Labour idea described by the one-time Tory Chancellor of the Exchequer, Iain Macleod, as blithering nonsense.

Mark Pritchard: I am glad to hear that the Secretary of State shares the values that he mentioned, but why does he not share my concerns, those of my hon. Friend the Member for Salisbury (Robert Key), and those set out in a letter to me from the Bishop of Hereford today, which concern the fact that all faith communities will be affected by the withdrawal of equivalent or lower qualification funding, including imams and rabbis, and clergymen from all the Christian churches of this nation? Is that what he calls upskilling, and is it, in his view, helpful to community cohesion?

John Denham: Clearly, a number of issues about particular courses that may be affected were rightly raised in the consultation. I will not anticipate the result of the consultation, because we have not yet received the report from the HEFCE, but I acknowledge that a range of issues have been raised, some of them by the hon. Member for Havant, and we will need to consider those issues carefully.
	Given the values that I share with my right hon. and hon. Friends, I would not be making the proposals if I were not confident of the future of the Open university, Birkbeckan excellent institutionand the other higher education institutions that provide higher education to people who would otherwise miss out. We need to deal with two issues tonight. The first is the issue of principle. Are the Government right to reprioritise funding away from students who already hold an equivalent or higher level qualification, in order to support students who have never had the chance of higher education? The second is the issue of practice. Can the changes be implemented without causing wider ill-effects on individual institutions, the higher education system as a whole, and reasonable opportunities for learners?
	Let us all be clear: there is no cut to overall higher education funding. Spending on higher education will remain at the record levels established by this Labour Government. By 2010-11 there will have been an increase in Government spending of over 30 per cent. in real terms since 1997-98, and there will be 2 per cent. real growth per annum over the next three years. Of course, in sharp contrast, between 1989 and 1997, when the hon. Member for Salisbury (Robert Key) was a Minister, state funding per student fell by 36 per cent.

Nigel Evans: I accept what the Secretary of State is saying, as far as the global budget is concerned, but does he not appreciate that if he carries on with the proposals, there will be unintended consequences? I have received a letter from a constituent, Chris Holden, who wants to be ordained. He gained a degree from Lancaster university a few years ago. He recognises that if the funding disappears, there will be an enormous impact. Does the Secretary of State recognise that there will be unintended consequences if the Government carry on with the proposals?

John Denham: One of the reasons for holding a consultation is to ensure that Ministers understand the consequences. That is why one consults. An initial idea is always put forward, so that we can find out the detailed reaction. I notice that the hon. Gentleman did not make the obvious point that I would make: today, the choices available to the House and to people who want to enter higher education are vastly greater than when the Conservatives were in power. The Opposition have still not acknowledged the damage that they did to higher education in their time in office.
	The Government have asked the HEFCE to advise us on how to distribute 100 million of core teaching grant over three years. That money will not be lost to the system. It will be redirected to fund more university places for first-time learners, or learners progressing to a higher level of qualification. Up to 20,000 full-time equivalent studentsand so, in reality, far more students, some of them studying part timewill have the chance to start a first degree or higher level course in the first three years. That sets the right priority for individual opportunity, and for the country.
	We have to develop the skills of our people to the fullest possible extent, carry out world-class research and scholarship, and apply knowledge and skills to create an innovative and competitive economy. As the noble Lord Leitch made clear, to be in the premier league for skills, our country will need 40 per cent. of working-age adults to have a level 4 qualification by 2020. Today, 20 million working-age adults do not have a degree-level qualification. An extra 5 million people will need to go through university by 2020 if we are to be even on the edge of the premier league for world-class skills. Lord Leitch not only set out the challenge, but was clear about the priorities for funding: the higher the qualification, the greater the level of individual or employer contribution. He argued that that was fair, given the benefits for individuals and employers who gain higher-level skills. Those principles are being applied across the adult education system.
	We took the difficult decision to introduce variable fees. When we face a choice, as we do today, both economic success and economic justice argue that public money should go first to those who have never had the chance of higher education. The choice is between second chances for those who have already enjoyed substantial public funding for their degree, and first chances for those who never have.

David Howarth: I thank the Secretary of State for giving way to me a second time, but I am still confused about how the problem came about. He mentioned 100 million. Did he ask the HEFCE to find him 100 million, and if so, why is he now consulting on how to spend it, or did the HEFCE randomly decide to cut 100 million from its own budget?

John Denham: The position on that is clear, and is on the public record. I wrote in early September, asking for the HEFCE's advice on how to prioritise funding towards those who had not previously had the chance of higher education. That letter is in the public domain, so there should be no confusion about that.
	Let me give some background. Over the next 10 years or so, the number of young people available to go to higher education will fall by about 100,000. There will need to be a massive expansion of higher education opportunities for adults who have already left school, and who never had the chance to go to university; perhaps they did not think it was for them. Most of them will study part time, rather than full time. It is those people whom the Government want to benefit from the change in priorities. I believe that they should be the first priority for a Labour Government. But of course I recognise that it is not as simple as that. There are people who have had higher education, perhaps 20 years agoperhaps women who have taken time out to have a family. It is necessary to develop the work force that the country needs. The measures on which the HEFCE has consulted offer a balanced way forward.
	For those who wish to have vocational retraining because their qualifications are out of date, foundation degrees are protected. They will continue to attract ELQ funding. For those wishing to study science, maths, engineering, modern languages, education, some medical disciplines and other strategically important subjects, ELQ funding is protected. For those wishing to top up their qualification, perhaps from a higher national diploma to an honours degree, ELQ funding is protected. For those whose employers will co-fund their courses, ELQ funding is protected. In other words, many opportunities will remain open to those seeking to obtain higher qualifications.
	Not everyone is covered, but for many of those, the value of investing in their own higher education will be well worth the cost of a subsidised career development loan, just as many people at lower levels of skill who have never had the chance of higher education also pay towards the cost of their qualifications.

Mark Lancaster: The Secretary of State has just issued a long list of exemptions, but he is as aware as I am that that represents just 4.6 per cent. of people currently studying at the Open university, which will potentially be affected by the proposal.

John Denham: I believeI shall return to this laterthat the Open university is probably better placed than many other institutions because of its style of work, the ways in which it can reach people who want to study from home or study part time, and its ability to design new courses to appeal to people who do not study there at present. It is true that not every course at the Open university is protected by that list, and clearly, there could not be a reprioritisation of funding if every course was protected. None the less, I am considering first and foremost whether the higher education system will protect a range of opportunities for people who wish to retrain in the way suggested in the debate, and I believe that the proposals do so.
	The detailed decisions on the measures that I have outlined must wait until we receive HEFCE's report, but overall I believe that we have set out the right priorities.

Gordon Marsden: My right hon. Friend rightly reminded the House of the emphasis that the Government have put on upskilling adults. The list of those who will be exempted is formidable and impressive, but will he ask the HEFCE to consider that there is an issue, particularly in our more fluid economy, in relation to self-employed people who may wish to take a further degree? They will not automatically be covered by the exemptions that he described.

John Denham: I respect my hon. Friend's knowledge on the matter and would be happy to discuss it after the debate. [Hon. Members: Why not now?] Without prolonging the exchange, I am not entirely clear about the point that my hon. Friend is making. Many of the routes that I have described as being protected would be available to those who are self-employed. The particular route of co-funded courses, for obvious reasons, may not be available, but that was not by any means the only route that I proposed.

Barry Sheerman: My right hon. Friend mentioned that he was awaiting the outcome of the consultation. Many of us who want to be persuaded by the arguments would be happier to hear from both the HEFCE and the Select Committee. There is no rush. Could we not wait for the Select Committee to make its recommendations?

John Denham: As a former Chairman of a Select Committee, I can hear myself making a similar argument if I were in my hon. Friend's position. The Government believe that it is important to press ahead with the beginnings of the change. If that is to be done, we must take decisions on a timetable that enables higher education to plan for next September. We cannot put ourselves in the hands of the Select Committee inquiry, because that is likely to put us beyond any reasonable time scale. We are, of course, interested in discussing issues with the Chairman and other members of the Select Committee and other knowledgeable and interested parties, but I cannot commit myself to the time scale that my hon. Friend has asked for, as we must make progress.

Several hon. Members: rose

John Denham: I shall take one more intervention, then I shall make progress.

Robert Key: I am grateful to the Secretary of State, who is being typically accommodating, if I may say so. If he cannot give such a commitment, can he at least say that he is prepared to consider putting on the exempted list theology and theology for ministry courses, which would have such a profound impact on all the religions in this country?

John Denham: I do not want to be drawn into a topic-by-topic discussion of the list, because we have not yet received the report from the HEFCE. The point that the hon. Gentleman makes was made earlier. I acknowledged that there was an issue to be debated and I do not think that I should say more, because we genuinely have not taken decisions but we recognise the breadth of opinion.
	Having set out the issue of principle, I turn to an equally important issuepractice. Can the change be made without the damage that some are claiming? It will undoubtedly mean change for every higher education institution. For some, including the Open university and Birkbeck, the change will be greater than for others, but the approach proposed by HEFCE is designed to ensure that institutions can respond, and that they are protected while they do so.
	First, transitional protection will mean that no institution will lose money in cash terms against its 2007-08 baseline over the next three years. That protection would exist even if those institutions did not successfully attract a single additional student. Secondly, as I said, a range of courses are protected from the change. Less than a third of the ELQ budget will be reprioritised over the next three years. Thirdly, clear incentives are proposed to enable institutions to further protect existing funding and attract additional funding.
	Courses that attract employer co-funding are protected and will continue to attract ELQ funding. Over the coming years we need to expand the number and range of employer co-funded provision. The Minister for Lifelong Learning, Further and Higher Education recently announced an additional 100 million of co-funded higher education courses over the next three years. Employer take-up of that money will obviously be greatest where higher education institutions offer the courses that employers want to those employees who need to retrain on a part-time basis, who need to be able to study flexibly and who need to be able to study from home. Not only can the Open university and Birkbeck bid for those funds, but the way that they operate and the education that they offer means that they are particularly well placed to develop the higher education that employees, employers and the wider economy need.
	Fourthly, the HEFCE proposes to increase the targeted allocation for part-time students. The proposal is intended to maintain part-time courses that might otherwise be affected. Finally, there are some specific institutional issues. The Open university, for example, has piloted a number of schemes to widen participation through work with parents and grandparents, and it has done work on the provision of online materials. It provides opportunities for disabled students to access higher education. There are opportunities to review with the HEFCE how the funding model can better and more explicitly reward these valuable activities.
	Cash protection, protection of a wide range of key courses, opportunities for increased employer co-funding, and improved support for part-time courses will together enable institutions to respond to a change that is being phased in over three years.

Mark Todd: What response has my right hon. Friend had from employers to the opportunities that he is proposing for co-funding partnerships?

John Denham: We currently have 15 highly successful pilot schemes of co-funded courses with funding from employers and funding through the HEFCE. That is the basis on which the much larger sum has been committed.
	The hon. Member for Havant rightly referred to the enthusiasm of the director general of the CBI for the development of such co-funded courses. Unfortunately, the hon. Gentleman deliberately misquoted by running together two quotes from the director general of the CBI slightly out of context. The director general of the CBI said:
	No doubt there will be real interest in possibilities of co-funding now being developed by the Government. Business will welcome more incentives to develop courses of this kind.
	I am therefore confident that institutions will be able successfully to attract new funding from employers for a wider range of courses relevant to the labour market.

Rob Marris: My right hon. Friend will be aware of the interest of the Minister for Science and Innovation in the university of Wolverhampton, which is headquartered in my constituency. I spoke to its vice-chancellor today. She told me that, even with the protections to which my right hon. Friend refers, it would lose, under the proposals, 6.5 per cent. of its grant2.4 million a year.
	I am talking about the most accessible mainstream university in the country. Due to the deprivation of the local economy, trying to get co-funding from employers, as the university has been trying to do, is difficult. I urge my right hon. Friend to be careful of some of the consequences of a proposal the broad thrust of which I strongly support.

John Denham: Obviously, I do not have the detailed information about the institution mentioned by my hon. Friend. However, I will make this additional point: institutions should not forget that the 100 million that is being reprioritised from ELQ is available to higher education institutions to attract new students. An institution such as Wolverhampton will be able to bid for that money to extend the opportunity for higher education to those in the deprived area that my hon. Friend mentioned who have never been to university.
	No money is lost under the system; there will be a reward for the institutions best able to attract and offer higher education to people who have never had the chance to go to university. It is true that we are not carrying out a central allocation of funding. We wish to incentivise institutions to reach out, get to those students and draw them in. The money is there and it will be available for the institution that my hon. Friend mentioned to bid for, as it will for others.
	To summarise, to handle the transition there is cash protection, the protection of a wide range of key courses, opportunities for increased employer co-funding, improved support for part-time courses and the ability to bid for all the funds that are being reprioritised. That is why I am confident that institutions will be able to respond in the next three years.

Barry Sheerman: What would my right hon. Friend say to the constituent who wrote to me this morning? As an 18-year-old, he had done a chemistry degree at Manchester and then served nearly 32 years as a probation officernot a high-earning occupation. He was looking forward to taking an interesting degree when he retired at 60, to stimulate him in his retirement. Under these rules, will such a thing be impossible for most older people?

John Denham: As my hon. Friend well knows, in the past three years we have reprioritised funding, across the education system, from informal learning towards the qualifications and skills most directly needed in our economy. My hon. Friend will be familiar with the fact that that has happened in further education.
	I recognise the value of educational opportunities pursued purely for benefit and individual gain. In the next few weeks, my Department will launch a new consultation on the future of adult learning in the 21st century. I want that to range from the leisure course in the local community to higher levels of education. I hope that my hon. Friend will take what I have said as an acknowledgement of his point and a suggestion that how we have met such need in the past may not always be how we will meet it in future. But yeswe need to find ways to meet that need, and in the next few weeks my hon. Friend will hear more about that from me and my Department.

Mark Durkan: The Secretary of State said that there is a three-year time scale for a number of elements on the menu of protections that he has identified. However, he has not mentioned any time limitation on protections for key courses and strategically important and vulnerable courses. Clearly, however, the Open university and others are briefing that those are also subject to a three-year time limitation. Will the Secretary of State take it from Members that we are not comforted and that three-year protections that work on a downward curve are no significant reassurance?

John Denham: I am particularly concerned about suggestions that 30 million or 31 million is at stake at the Open university, as though the money will disappear from its budget tomorrow. Such suggestions assume a much wider reprioritisation than we propose at the moment and an absolute cut-off of transitional protection after three years. The HEFCE consultation merely covers the comprehensive spending review period, so none of those things should be taken for granted and our proposals should be assessed on the merits that we have put forward.
	As I said at the Open university, that university has some 200,000 students. It would need to recruit 3,000 extra students in each of the next three years to make up what would be the shortfall for the next three years. That is the reality; it is not the impossible task described by many this evening.

Mark Todd: rose

John Denham: I shall take one further intervention, but then I must come to an end as many Members wish to speak.

Mark Todd: The Government have to take account of a number of criteria in deciding how to allocate funding, and my right hon. Friend has referred to some of them. May I refer to others, such as the aptitude and will of the student to take advantage of the opportunity and complete the course? One of the critical issues is whether the resources allocated will end up delivering a qualification.

John Denham: We have extremely good completion rates in higher education. If my hon. Friend is suggesting that the next group of students, out there in the community as adults who did not go into higher education after they left school, are not up to it and unlikely to succeed, he and I have a major disagreement. I believe that it is perfectly possible for higher education to attract the equivalent of 20,000 full-time students successfully and for those students to complete courses as well as anybody else.
	I should draw to a close.

Edward Vaizey: More! This is quality stuff.

John Denham: I am grateful to the hon. Gentleman for recognising that.
	Let me be clear. Ministers and the HEFCE recognise the challenge to many higher education institutions of changing their ways of working to respond to the new priorities. It will take time to change and develop new partnerships. The transition needs to be carefully managed; institutions need proper protection.
	I also recognise that no two institutions are the same. Birkbeck is already working with HEFCE to see how to respond most effectively. I hope that the Open university will do the same.

David Willetts: rose

John Denham: At the very last moment, I shall give way to the hon. Member for Havant.

David Willetts: The Secretary of State was talking about protection for the institutions. The Open university cites the figures that he disputes not because it has invented themthey are HEFCE's own estimates of the long-term steady state position that there will be at the end of the changes. Transitional support before getting to that end-term state is not sufficient; it does not tackle the fundamental problem. Will the Secretary of State clarify exactly what he is talking about?

John Denham: The figure on the HEFCE website assumesand that is HEFCE's decision, not oursa much greater reprioritisation than the Government have proposed or asked the HEFCE to advise us about. That is the reality. The point is very important and I hope that the hon. Gentleman will accept my answer. At the end of the three-year period, the amount of money that the Open university would need to make up through all the different sources of students that I have mentioned is about 12 million a year. I have already said how that can be done and set out the number of students involved and the sources of funding available to the Open university to do that.
	The Government have been prepared to take difficult decisions, including the introduction of variable fees, to support our world-class higher education system, and I ask the House to support us once more tonight. As Harold Wilson, who with Jennie Lee was the architect of the Open university, once said:
	He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery.

Several hon. Members: rose

Mr. Deputy Speaker: Order. I remind the House that the Government amendment has been moved in a slightly amended form from that printed on the Order Paper, with the substitution of the word higher for the word lower in line 3.

Stephen Williams: It is with some trepidation that I rise for the first time in my new role, chucked in at the deep end on the second day. I thank the hon. Member for Havant (Mr. Willetts) for his courtesy yesterday in alerting me to this subject. He explained in his introductory speech that the motion is based on an early-day motion. In the past couple of days, I have done several radio interviews based on one of my own EDMs about Bristol Old Vic, which I invite colleagues to sign. People ask what is the point of an EDM; well, this is the point. EDM 317 has now been withdrawn as we are, in effect, discussing it tonight, but the Table Office informs me that 211 Members had signed it. That is the most up-to-date figure, rather than what was printed this morning, and it includes more than 80 Labour Members, some of whom are in the Chamber. I hope that when we troop through the Lobby in just over an hour and half they will have the courage of their convictions to vote for what they signed.
	The new Department for Innovation, Universities and Skills is just over six months old, but it has already succeeded in upsetting just about everybody in the sector or outside the sector, including everyone from the director general of the CBI to the National Union of Studentsnot usually bedfellows. This is a fundamental change designed to introduce 100 million-worth of internal savings in the Secretary of State's Department. I wonder why he feels the pressure to make those savings.

John Denham: I welcome the hon. Gentleman to his new position, but will he accept that, as I told the House, these are not savings but a reprioritisation from one group of students to another?

Stephen Williams: I thank the Secretary of State for what he thinks is a clarification, and for welcoming me to my post. It is an internal saving or reallocation within his Department, and for some parts of the higher education sector it is a cut in their provision, so it is certainly a saving imposed on them.
	In his letter to David Young, chairman of the Higher Education Funding Council for England, the Secretary of State says:
	I will write to you again at a later date with full details of the Comprehensive Spending Review...settlement and my strategic priorities.
	The old Department for Education and Skills had its CSR settlement sooner than everybody else, so I wonder why it has taken so long to decide what the strategic priorities are. Of course, that settlement was made before the split and the setting up of the new Department, and I wonder whether this is a casualty of the disaggregation of the old DFES budgets. The change has been rushed through with little consultation. The Department's predecessor has form in that area, given that it announced, without any consultation at all with the higher education sector, that it was going to give foundation degree-awarding powers to colleges. It announced the decision and let everyone else sort out the details and deal with the implications. Once again, the higher education sector feels bounced. This decision will hurt its institutions financially, as well as individual students, some of whom will surely now decide that they are not going to go on to do an equivalent or lower qualification. That will undermine the Leitch agenda that the Government say that they are trying to achieve.
	I understand that some Labour MPs will have probably been getting some hostile correspondence, particularly if they represent relevant university seats, and I know that they have been given some helpful internal Labour party advice, which has also, rather helpfully, been given to me. I have the parliamentary Labour party briefing that has been circulated to help Labour Members to rebut the points that have been made by Liberal Democrats and Conservatives. If you do not mind, Mr. Deputy Speaker, I will quote from iteven though it says that I might be committing an offence by doing so, I believe that I am protected while I do it in this Chamber. There are some choice quotes.  [ Interruption. ] I notice that the hon. Member for Milton Keynes, South-West (Dr. Starkey) is laughing; an institution based in her constituency is raising this concern with her and with all hon. Members, so I do not think that it is an amusing matter. The tone of the briefing suggests that this is all a fuss about nothing. It says that
	the 100m is less than a third of the total funding of 327m that is currently spent on ELQ students.
	It is less than a thirdit is 31 per cent., so it is still a pretty significant amount of money. It says:
	Those with first degrees do not have to study at an equivalent or lower level than they already have. They can study for a masters.
	Surely that is missing the whole point. Students should be free to make their own decisions on what is necessary for them to increase their employability in the labour market, and if they need to study for an equivalent level qualification or for a lower level qualification, that is the choice that they should make and the choice that the higher education market should offer to them. It seems ludicrous to say that they could go away and study for a masters.
	On the Open university, Labour Members are told to tell us that
	it is important not to overstate the financial impactsome public comment has done so.
	I know who I would rather believethe Open university. The briefing also says that the Open university would get a share of the 100 million that has been reallocated within the DIUS budget
	if it recruits new students (which we strongly believe it can).
	The Open university has told us that it thinks that these proposals will undermine its existing course provision rather than enhance its ability to recruit new students. The briefing goes on to say:
	The OU had a 350m turnover in 2005-06 and has generated surpluses to top up its reserves.
	The implication is that that is okay thenit can afford to take a financial hit. That is rather like the Secretary of State's colleague in the new Department for Children, Schools and Families hovering like a magpie over schools' balances; the same attitude is being taken here.
	There are just two more quotes to go. The first is:
	Some people are asking us why we ever gave money to people on ELQs over those who didn't have a degree at all.
	This is the real gem:
	The government has made a strategic decision...HEFCE is consulting on the implementation of the policy...We can't consult on consulting.
	That attitude shows total contempt for universities, which are feeling bounced into this and that they have to deal with the implementation of the consequence of a decision that has already been made. The briefing was of course was a private document that was not meant to be circulated, but I am glad that somebody helpfully circulated it to me.
	What is in the public domain is the guidance for students who are contemplating an ELQ course, or have, in many cases, already applied. The DIUS website offers this advice for new students:
	prospective new entrants in 2008/09 studying courses at the same or lower level should contact the institutions at which they are interested in studying in a few weeks time to see what the position is.
	That is hardly helpful advice for somebody who is taking a fundamental decision. It goes on to say:
	We recognise that these changes may mean that institutions increase their tuition fees for Second Degrees, although they are not obliged to do so.
	How on earth are institutions going to make up for pretty drastic cuts, in some cases, in their core teaching grant if they do not increase fees? The website goes on to give the justification for this reallocation of funding, saying that 100,000 in public support is given to somebody who has progressed all the way to a second degree-level qualification, as compared to 55,000 of support to somebody who leaves school at 16. Surely that is not the right comparison to offer in public. I thought that the whole point of this was to reallocate money from people who want to pursue a second degree to people who might want to pursue a first degree.

Roberta Blackman-Woods: I was just wondering whether the hon. Gentleman is, very helpfully, going through the Labour briefing in such detail because he does not have any policies or points of his own to raise.

Stephen Williams: I thank the hon. Lady for her intervention. We in the Liberal Democrats are going through a fundamental review of our policies at the last general election.

David Willetts: And that is what the Government should do.

Stephen Williams: Indeed, the Government could do with some in-depth thinking as well. Unlike the hon. Lady's colleagues, my party will take a proper decision on the issue at a party conference, after 18 months of deliberation and the taking of expert advice from throughout the sector, including the Open university.
	What I have to say is not all negative. I recognise that there are exemptions, some of which the Secretary of State outlined earlier, particularly for SIVSstrategically important or vulnerable subjects. I have some questions for the Minister of State. What is the Department's calculation of the number of SIVS ELQs that will be exempt when the new arrangements are in place? How many students will not fall within that exemption, based on the information we have at the moment? Those students will have to pay for their education to make up for the loss of core teaching grants to the institution at which they are taught.
	What will the fees be? Does the Department have a view on what course fees institutions should charge to recover their costs? It is important to remember that someone studying for an ELQ at the moment may already be paying 3,000 for their second degree. The cost in question will be imposed on top of what they are already paying as a student. In effect, they will be treated like international students from outside the European Union. And while I am talking about the international aspect, what will the effect be on UK taxpayers who did their first degree at a foreign institutionsuch as my new party leader, for instance? It looks as though they will be charged in the same way, even though it did not cost the British taxpayer anything. Surely that cannot be right. There will be anomalies within courses where people studying exactly the same course, sat next to each other in the same lecture theatre, could be paying nothing, or 10,000.
	There are also anomalies within the exempt courses. Medicine has been mentioned, but what about the professions allied to it? What about radiography, physiotherapy or psychology? My hon. Friend the Member for Cambridge (David Howarth) mentioned cognitive behavioural therapy. Stress in the workplace is important, and we need to deal with it to achieve the Leitch agenda and get more people back into work. However, none of those professions allied to medicine fall within the exemptions.
	Not only has there been no consultation on the implementation of the funding change, but there has been no equality impact assessment, and I would like to know why, particularly when many ELQ students, or first-time students studying part-timethey may feel the ongoing implications as their courses become unviableare likely to be older students. The majority, as in the rest of higher education, will be women. The Open university tells us that 13 per cent. of its current ELQ students come from the bottom quartile of areas of multiple deprivation. There are certainly the sort of equality implications that the Government want everyone else who changes their policy to consider, whether in local government or elsewhere, but they do not seem to have gone through such an exercise before they made their announcement.
	The changes will undermine the delivery of the Leitch recommendations. The 70 per cent. of the 2020 work force referred to in one of the most quoted parts of Leitch are already in work, and they will need the retraining implicit in the taking of an ELQ. The Open university tells us that 68 per cent. of its existing ELQ students are over the age of 35. They are precisely the people whom the Leitch report talks aboutpeople who will need to upskill at some point during their career. If a person is over 35, their first degree is clearly 15 years out of date. Birkbeck has specialised in the refreshing of adult skills since 1823, but it tells us that the proposal will fundamentally undermine its capacity to support Government policy. It provides several case studies, and I shall just mention one. Jayne Kavanagh got her degree in medicine in 1990, but in 2002 she went to Birkbeck in order to do a degree in philosophy. Birkbeck says:
	A degree in Philosophy might be regarded by many as an esoteric qualification, but...it has helped her to become lead in medial ethics and law at the Royal Free and University College Medical School.
	Surely everyone would think that worth while.
	The change may lead to some courses becoming unviable. The Open university and Birkbeck have provided examples and many other higher education institutions, including Bristol university, have made representations to me.
	The change will be especially felt by smaller institutions, particularly specialist institutions. The National Institute of Adult Continuing Education has given several examples. The Conservatoire for Dance and Drama will suffer a 26 per cent. cut in its core teaching income. The Institute of Cancer Research will experience a drop in its core teaching income of 19.5 per cent., which undermines the publicity that the Prime Minister received for his new found enthusiasm for prevention being better than cure. In an Act last year, the Government gave further education colleges foundation degree awarding powers, yet their provision for full-time higher education honours courses could be undermined because they tend to be few in number. There is a lack of joined-up thinking.
	Switching 100 million in the budget is a case of robbing Peter to pay Paul, which brings me to recognising the effect on the clergy that several hon. Members have mentioned. Westcott house in Cambridge and Trinity college in my constituency are examples of institutions that could be affected. They say that 60 per cent. of ordinands who go for training in the Church of England do not do their first degree in theology, so they clearly need to study a further course. Training for the priesthood is obviously not a Leitch targetit must be one of the few things that does not have a target in the Leitch report.
	The final disadvantage of the proposals is the regulatory and administrative burden that they will impose on universities. How will they know, when someone approaches them, whether that person already has a degree? There is no national register that they can check. The proposals will impose an additional burden on them. After yesterday's news about the Irish international university, we know that anything is possible in higher education.
	If the Government want to effect the proposals in the Leitch reportto which Liberal Democrats are signed up; we recognise that they are necessarysurely it would be better, if higher education is to make its contribution to delivering the Leitch agenda, to do something to help part-time students in the way in which the old Select Committee on Education and Skills recommended. We should remove the distinction between full-time and part-time students, as happens in Australia. Our higher education funding system is modelled on that in Australia, with the exception of the anomaly that I outlined.
	As I said earlier, the Department is only six months old but it already appears to have upset many people in the sector. We have heard much about the Labour Government's legacy in recent times. The Secretary of State ended his speech by citing the main legacy of the 1964-70 Government, led by the previous longest serving Labour Prime Minister, Harold Wilson, as being the Open university. I am sure that right hon. Gentleman does not want to be the Secretary of State who damaged the Open university. Despite what he says, the Open university tells us that that is the implication of his policy announcement. Surely it would be better to delay implementation until 2009.
	Whenever I have taken part in such debates, the Minister for Lifelong Learning, Further and Higher Education has said that it would be 2009 before the Government understood all the implications of the changes that they have made in higher education in the past five years. He said that it is too early to tell whether the changes have had an adverse impact on applicationsindeed, too early to tell many thingsand that the Government would hold an in-depth review in 2009, as was promised when the Higher Education Act 2004 was being considered.
	Given all that, why introduce such proposals now? Why are the Government subjecting themselves to such self-inflicted pain when a fundamental review will take place next year? Surely it would be better to postpone the change and wait until the in-depth review so that they can have some joined-up thinking and a properly thought-through policy.

Several hon. Members: rose

Mr. Deputy Speaker: Order. Before I call the next speaker, let me remind the House that the 10-minute limit on Back-Bench speeches now applies. An awful lot of hon. Members are trying to catch my eye and it would therefore be helpful if they felt able to take less than their 10 minutes.

Frank Dobson: Birkbeck college is in my constituency. It is one of many distinguished academic institutions in my constituency but most of the others provide full-time courses for undergraduates and graduates. Birkbeck provides full-time courses for graduates but mainly part-time courses for teaching people to study for first degrees or other, lower qualifications. Its undergraduates are not the usual 18 to 20-odd-year-olds; they are people who work for a living during the day and study at Birkbeck in the evening. Unlike other undergraduates, they also pay tax, because they are working people, so when we talk about looking after taxpayers we are talking about them, among others. Those students show an amazing commitment to learning and a zeal for knowledge that puts to shame what I suspect most graduates in the Chamberthat certainly includes meshowed when we had the privilege of doing our full-time degree courses.
	Some 2,600 of Birkbeck's part-time students already have degrees and are working for equivalent or lower qualifications. They include women who want to study again after taking time off to bring up children, people who have lost their jobs, people who are disabled and people whose first degree proved unsuitable or irrelevant to their current occupation. Nearly all Birkbeck's part-time students are seeking to upgrade their knowledge and skills. They include people in management who want to make further studies of personnelor human relations, as I believe it is called these daysas well as people who feel the need to add IT or computer science skills to enable them to progress in their current occupation, and those, including doctors and nurses, who work with the elderly, the mentally ill or children in the day and want to study psychology to improve their ability to look after those people.
	Generally, part-time students at Birkbeck are not doing flower arranging. They are studying serious subjects. They are doing what the Government want: upskilling themselves. They are setting an example for others, in respect of what the Prime Minister said he wanted when he talked about people needing not one chance but second, third, fourth and, indeed, lifelong chances. That is what Birkbeck has been providing since 1823, but the Government are stopping the funding of those courses, against a background of part-time students and what might be described as part-time institutions getting a raw deal, compared with full-time students and colleges that mainly deal with them. That has gone on for decades.
	The Government's decision means a reduction of about 1.6 per cent. for institutions providing full-time studies, but a reduction of about 16 per cent. for institutions providing part-time studies. The impact on institutions that provide part-time opportunities rather than full-time study is therefore 10 times greater. Yet the work of Birkbeck and other institutions that provide part-time courses is crucial to the Government's plans for widening participation. They are the very institutions on which much of the Government's strategy will depend. Indeed, Birkbeck recently opened what might be described as an outpost in Stratford, in the constituency of my hon. Friend the Member for West Ham (Lyn Brown), in an effort to spread the opportunities and the benefits.
	The Government have said that they will try to help Birkbeck and the others by making provision to tide them over, but that help is time limited. My understanding is that if those institutions are successful in obtaining alternative sources of income, the safety net will be reduced by however much their efforts succeed in securing. The question then is: where can they get the extra money from? Most part-time students and people who go to night classes are not very well off. They cannot get student loans, and their means-tested grants, which are available to a limited number because such students have incomes, are not pro rata, as with grants for full-time students, and are capped at a low level.
	I am therefore disappointed with the Government's decision, as well as concerned about it. There does not seem to have been much consultation before the outline decision was taken. I find it hard to believe that this is being done by good and decent people such as my right hon. Friend the Secretary of State for Innovation, Universities and Skills. He is my friend and he is honourable, but he is not right; he is wrong on this occasion. I cannot believe that Ministers have seriously considered the impact of this change on individual institutions.
	I was also perturbed to encounter a suggestion by one Minister that there were more than 250 higher education providers in England so that students could shop around for the best deal. That sounds rather like an on yer bike statement de nos jours, which fails to understand the position of the part-time student. For full-time students, study during the day is their main object, so they can shop around and go to where the course they want is provided, but it is not the same for part-time students, who work for a living during the day and study in the evenings. They cannot shop around; they have to stay where their job is; they are not as mobile as the average undergraduate.
	Setting aside the impact on students, are the Government seriously telling Birkbeck to go up market? That is plainly contrary to the Government's policy and Birkbeck's proud record for the past 185 years. It is also plainly contrary to Birkbeck's modern intentions, which included and led to the setting up of their outpost in Stratford, east London. I believe that its response has been very temperate. It is asking only for the Government to exempt more subjects from the cuts and to exempt people who are coming back for a second helping, so to speak, after being out of education for more than five years. That would exclude what might be described as the serial scholars. It is a perfectly reasonable request to make and I hope that further long-term support will be provided to Birkbeck and the other institutions to cope with the change in funding and to enable Birkbeck to continue what I regard as its noble past over those 185 years of providing teaching to working people who have a thirst for learning. It is not too late for the Government to reconsider at least the practical implications of what they are proposing.

Mark Lancaster: I confess that early-day motions have been dismissed in the past as political graffiti, but you can imagine my delight, Mr. Deputy Speaker, when I discovered that early-day motion 317, tabled in my name, had been selected as the motion for tonight's Opposition debate.
	I make no apologies for the fact that I will be extolling the virtues of the Open university. It is a great honour to represent that university in this Parliament and I am sure that the Open university is held in great regard by hon. Members from all parties. I should first point out, however, that not only the OU will be affected by the Government's decision, as 22 other institutions will be equally affected. The motion is very reasonable. Perhaps that is why 86 Government Members decided to sign it. I confess that I thought that we might make some progress tonight, but judging from the Secretary of State's speech, I fear that I may well be disappointedthough we shall see.
	The Open university is not only one of Milton Keynes's biggest success stories, with more than 200,000 students studying every year; it is one of the UK's best success stories, which is emulated worldwide. In 2003, for example, the OU helped in the middle east to set up and provide teaching materials for the Arab OU, which already has 30,000 students. Our Open university has paved the way and helped other countries to establish their own open universities to allow people all over the world to improve their academic records, which otherwise would have been too expensive or too time-restrictive to pursue. The OU has recently started talking to the Government of China to explore the benefits of collaboration on open and distance learning to meet the huge growth in demand for higher education, which its growing economy requires.
	The OU has served as the leader in bringing education to those whose time and finances do not allow them to take three years out for full-time study. It has led the world in harnessing the widest possible range of assisted technologies to enable people with disabilities to study. For example, some 3,500 ELQequivalent or lower level qualificationsstudents have special needs and want to study on an equal platform with their peers. From the OU's earliest experiment in using the latest technology to take education right into people's lives via their TV sets, it has continued to pioneer ways of reaching ever more people in ever more places, using the almost limitless power of the digital age.
	More than 125,000 teachers in Uganda, Sudan and Nigeria are now using the Open university's learning materials. Moreover, since last year the OU's audience has included new migrants in London developing language skills alongside OU qualifications in health and social care. I understand that, although those migrants may wish to study for United Kingdom-based degrees, the Government's proposals will prevent them from doing so if they already have an equivalent qualification from overseas.
	The IT skills gap is one of the crucial challenges facing the UK economy today, not just because the IT sector is booming but because all business areas are leveraging competitive advantage by adding value through IT. More than 70 per cent. of jobs advertised in the United Kingdom now have an IT component, and the only way in which the UK will be able to address the widening gap between supply and demand is by upskilling and reskilling people who are already working in the UK economy. The OU is a major contributor in this arena nationally, allowing people to update their IT and business skills in line with their job requirements without needing to enter a classroom. Every year more than 30,000 computing, IT and business course places are taken by part-time OU students.
	Only today, the Prime Minister said that he wanted to help the Open university to achieve its aim of reskilling and upskilling the current British work force. How strange, then, that the OU should have been one of the principal victims of the decision to remove funding from those studying for courses that involve equivalent or lower qualifications. They are precisely the work force who are needed by the British economy, and the decision was made without consultation either in the sector or in business.
	Men and women who are sacrificing their time to re-educate themselves in absolute conformity with the Prime Minister's stated aims of lifelong learning, and who mostly remain in work paying taxes and supporting our economy, are to be treated less favourably than other students. In many cases, employers will not make up the lost funding. It is very rare for the employers of people who are trying to forge new career paths for themselves away from their current jobs to help fund their spirit and drive to better themselves. Under the proposed new funding system, people who went to university straight after school or college but left the workplace in later life to raise children or become carers of relatives will have their right to re-equip themselves for the rapidly evolving UK economy denied.
	May I present the Minister with a brief case study showing the sort of person who will be affected by the changes that he proposes? Lydia Stanley writes:
	In 1982, at the age of 21,I completed an ordinary BA degree in French and Science in Society. I didn't really know what I wanted to do with my life at the time, and ended up doing a secretarial course, after which I worked as a secretary for 19 years.
	I had felt rather discontent with secretarial work for some timeit can be a good career but I didn't really feel it was for me. In 1999, one of my friends got hold of an OU prospectus. I decided it sounded very interesting so I enrolled on the course Using Mathematics, after which I switched to computing courses.
	In 2002, when I was about half way through my OU degree, I was made redundant from my secretarial job. By then I felt I wanted to work in IT and started to work as an IT Volunteer at Victim Support, the charity that supports victims of crime, in order to gain some experience. About a year later, I was employed by them on a fixed-term contract, and eventually on a permanent contract. I therefore started my first IT job at the age of 41, and am still working on their IT Service Desk.
	In 2006 I completed the named BSc in Computing and gained a First.
	Regarding funding, I doubt I would have studied with the OU if the fees had been a lot higher, and would probably still be doing secretarial work or something similar.
	Given the Government's supposed commitment to lifelong learning, I am sure that Lydia and thousands like her will be deeply disappointed by the Minister's explanation of why they are to be discriminated against by this ill-conceived Government initiative.
	The fact remains that the ELQ policy will frustrate attempts to enable people of working age to update and broaden their knowledge and skills in line with the changing needs of the economy and of society more generally. Some 68 per cent. of OU ELQ students are over 35; most can therefore be assumed to have degrees that are at least 10 to 15 years old and in need of updating. Crucially, the policy will withdraw Government support from most graduate development. Most ELQ students at the OU are studying business studies, maths, computing, technology, science, education and languagesjust the sorts of skills that the Government claim to be encouraging.
	Higher fees for ELQ students will create a disincentive to continuing professional development, and a genuine risk that the main economic benefits of CPD will be lost. Contrary to popular belief, most ELQ students pay their own fees. Only 13 per cent. of ELQ students at the OU receive any fee contributions from their employers and just 10 per cent. have all their fees paid by their employer. The idea that funding will be readily available from employers is simply plain wrong. Why would an employer pay for an employee to train to change career only to leave their employment? What about self-employed people? To quote one OU student:
	I am self-employed so 'support by employer' is basically the same as paying my own fees. I am studying with the OU business school. I can barely afford it as it is.
	Pricing research undertaken both by Universities UK and the OU shows that part-time students are extremely price-sensitive. There is a high risk that thousands of ELQ students studying for vocational reasons and paying their own way will be priced out of continuing professional development by the Government's ELQ policy. It is equally true that certain groups of students will be particularly affected.
	Research shows that employers have tended to offer support mainly to full-time workers from the wealthiest households. Part-time employees, the self-employed and those on low incomes will be disadvantaged, as will those such as carers who are temporarily out of employment. The Minister need not take my word for it; I have a few more quotes from current OU students:
	I am a single mum trying to survive on a less than average public service salary in expensive London. These changes would effectively bar me from the opportunity to help myself.
	Another student said:
	Part-time study while working is difficult enough as it is. Adding a large financial burden will most likely provide the justification for not bothering in the first place.
	Ministers have made some exemptions to the ELQ policy and HEFCE has proposed others, but they do not go far enough. The fact remains that only 4.6 per cent of HEFCE-funded ELQ students at the OU will be exempt under current proposals.
	Finally, I would like to highlight the impact of the policy decision on OU funding. It will reduce resources available for core services at the OU and will jeopardise plans for growth and innovation. In financial terms the OU will lose funding for 25 per cent., or 29,000, of its 140,000 students in England from 2008, which combined with the HEFCE estimated loss of grant of 32 million is a total lost or at risk in 2010 of some 49 million.
	The motion is reasonable, which is why some 86 Government Members have signed it. All I am asking is for the Government to stop, consult properly and think again about whether this is really what they want to do to fit in with their agenda for lifelong learning.

Phyllis Starkey: I am sorry that the hon. Member for Havant (Mr. Willetts) is not here at the moment because I was going to congratulate him on the clever debating device of using the early-day motion as the Conservative motion. The problem is that once he started to speak to that motion, he added lots of things to it which those of us who signed the EDM would not necessarily agree with.
	I welcome this opportunity to rehearse again the virtues of the Open university. I do not intend to do so at great length because many others have already done it, but it is a fantastic institution. It has made degree level courses available to a wide range of individuals whom conventional universities would not allow to take degrees. It has contributed over the years precisely to upskilling and skilling many who would otherwise have been trapped in very low-skill, low-paid careers. I understand that the OU's commitment is to make sure that it is able to continue in that role, and I simply intend to repeat the three major points that I have made directly to Ministers in meetings, most recently just before Christmas when my hon. Friend the Minister for Lifelong Learning, Further and Higher Education met me and two trade union representatives from the Open university. I understand that a final decision will be made on the detail of the proposals in mid-January.
	The first point relates to the list of exemptions. There are strong arguments, made when the trade union representatives met the Minister, about adding IT to the list. It is clear that individuals who took their first degrees about two decades ago are unlikely to be quite up to the minute on IT skillsto put it mildlyand that therefore there are strong reasons why individuals who already have one degree might wish to get another at the same level but in IT. When we spoke with the Minister, he was sympathetic to the arguments we made although, obviously, he felt unable to commit himself at this stage when the final announcement has not been made. I certainly hope that IT will be included.
	The second issue is employer co-funding. Employers, who gain enormous benefit when their employees are upskilled, should be expected to co-fund the training of their employees; that is highly desirable. There are lots of reasons why they should do so. If employers treat their employees well, on the whole their employees feel a sense of loyalty and tend to stay with them. Providing decent training helps not only to upskill their work force but to engender a feeling of loyalty among them towards their employerand, of course, the employer cashes in on the employee's experience of the firm or business and the way it works, instead of having to bring in somebody new who would not be familiar with that. Therefore, we should expect employers to co-fund more of the training of their employees.
	However, a reasonable point was made by Open university people: although employers are often willing to co-fund the training of their senior staff, they can be a lot less keen to do so for middle-ranking staff. As what we are requiring is a comprehensive change in culture among businesses, Ministers ought to be a little more cautious about the speed at which they believe we might be able to persuade employers to change their culture. I therefore ask Ministers to consider phasing in these changes over a slightly longer period in order to see quite how successful they are at persuading employers to be more effective in funding training.

Phil Willis: Can the hon. Lady give the House one reason why an employer would wish to support financially an employee to do an ELQan equivalent or lower qualificationwhen the outcome of that would be of no benefit to their business?

Phyllis Starkey: Obviously not, but that is a curious question to ask because I could throw it back by asking why an employer would not co-fund an employee's training if that training was going to benefit the employer  [Interruption.] I will get on to the point about people moving employer. In many cases, rather than looking to recruit more highly trained people from outside the business, an employer could be thinking of, so to speak, growing their own expertise by retraining individuals they already employ at a much lower level. That is perfectly reasonable.

Several hon. Members: rose

Phyllis Starkey: I will not give way because, unlike Front-Bench spokespeople, if I do I will lose timeI can give way once without losing time, I think.
	Employers will obviously not fund everybody, and they certainly will not fund people who actually desire just to go off to another employer, but that does not cover all cases, or even the majority necessarily.
	The third issue has been alluded to: women returners. They are probably the largest single group who are likely to have taken a degree a long time ago, and which they have not been using recently as they have not been at work because of family responsibilities. Because they have not been at work, they do not have an employer to co-fund their training. Therefore, Ministers should consider the group of women returners in more detail as they are a special case. For a huge range of reasonsnot least those of equality, but also of making use of the skills and experience that such women can bring to the work forcewe ought to make sure that any proposals we put forward do not inadvertently militate against that group.
	Those are the three points that trade union representatives made directly to the Minister, and which I wanted to repeat in the debate. I am confident that the Government will have been listening to the points people have made and to the feedback that the Higher Education Funding Council for EnglandHEFCEhas received from universities during the consultation period, and that the final proposals will not be the same as the original ones. If they were, they would be likely to cause unacceptable damage to the Open university and, presumably, to Birkbeck, which is an institution that I know less well, so I strongly urge Ministers not to bring back the original proposals.
	As the hon. Member for Havant has now returned to the Chamber, I want to make a final remark about some of his comments on the general system of university funding. As someone who had been on the receiving end of it before becoming an MP, it seemed to me that some misdirection was being given to hon. Members who might be slightly less familiar with how HEFCE has, for some time, taken decisions on the priorities to be given to different subjects. An individual with qualifications does not have a right to have a place on a degree course and subject of their choosing just because they fancy it. That has never been the case in the British system, unlike the French system, where someone can turn up at a university, sign up to something whether or not sufficient places are available and engage in a ridiculous Darwinian survival of the fittest that has a huge wastage rate.
	HEFCE has always taken decisions on university funding. It decides which subjects it regards as being more necessaryin the national interestthan others and uses the funding accordingly. To suggest that expressing priorities is an outrageous departure [Interruption.] No, this is precisely the point that I made about the early-day motion, because if one reads it carefully one finds it does not say what Conservative Members are suggesting. I accept that individual Members who signed it may mean it to mean different things from what other Members mean it to mean, but it asks the Government to consider the representations that are being made to them by the Open university. That is what I am asking the Government to do now. There has been a consultation period and they have received representations, so I am asking them, as the EDM did, to consider the matter and to make changes. I believe that that is also what the Government's amendment does, which is why this debate is somewhat curious. I would want to vote for both the motion and the amendmentthe two are entirely consistent.

Phil Willis: It is a pleasure to follow the hon. Member for Milton Keynes, South-West (Dr. Starkey). I do not know whether she will vote for the motion or for the amendment. I do not think it is against the rules to vote for both, and she will doubtless do so.
	I want to make a brief contribution. It has been mentioned on a number of occasions that the new Select Committee on Innovation, Universities and Skills is holding an inquiry into the issue of equivalent or lower qualifications, following an unprecedented barrage of correspondence and lobbying not only by the Open university and Birkbeck, but by universities ranging from those as far north as Sunderland and Middlesbrough to some of the London colleges. It is important for us to widen the debate. We must not consider only the Open university and Birkbeck.
	Our inquiry will examine four key things. The first is the arguments presented by the Secretary of State and the Minister for Lifelong Learning, Further and Higher Education for phasing out support given to institutions for students studying ELQs. The second is the timing of the decision on the implementation of change, given the proposed review of higher education funding and fees for 2009-10. The third is the exemptions in respect of certain courses, as proposed by HEFCE. We will want to know, as doubtless will the Minister, why HEFCE has not exempted such courses as theology and pharmacythe list could go on. The fourth is the impact on students, in particular women and older workers. The issue of immigrant workers has been mentioned. They often come to this country with a degree that is not accepted in the workplace, and thus there is a need for retraining. We hope to obtain information on those four criteria.
	Finally, we will look at the impact on institutions, especially the long-term implications for specialised institutions such as the OU and Birkbeck. We hear the Minister's comments about supporting the universities over the first three years, but the crucial aspect to understand is what happens at the end of those three years. When the Minister winds up, I hope that he will tell the House what will happen after those three years if the OU, for instance, has not made up the quota of students that would guarantee its base resource funding. Do we go on supporting it or will it have to make significant cuts in its organisation? That is an important question.

Mark Durkan: When the Secretary of State responded to my intervention about the protection lasting only three years, he explained that that was the length of the comprehensive spending review period. However, there is a protection for six years, in terms of the teaching out of people who have already started an ELQ at the OU, and hon. Members are right to be concerned that the other protections will last only three years.

Phil Willis: I am grateful to the hon. Gentleman for that intervention, and I am sure that the Minister will respond to that point when he winds up. I hope that the inquiry will also be able to clarify the situation.

Roberta Blackman-Woods: Has the hon. Gentleman considered that the Leitch proposals suggest that many more people should have level 4 qualifications and above? There will therefore be a pool of adults from which the OU and other higher education institutions will be able to draw additional students in the future.

Phil Willis: I shall return to the subject of the pool, because there is a real question about where the 20,000 extra students will come from, especially as we will have a significant demographic downturn. The number of 18-year-olds going to universities will decline significantly over the next decade. I take the hon. Lady's point that there will be a pool of people which will need to be tapped, especially married women who are returning to the work force.
	Despite the Christmas period, we have already had 300 submissions to the inquiry and the Minister will not be surprised to learn that most are hostile to the proposals. We hope that by 14 January we will have had even more responses. I have not carried out a scientific analysis of them, but the typical response is from someone who took a three-year full-time arts degree as an 18 to 21-year-old and now plans to take a degree or lower qualification in computer science, accountancy or management. They are people who genuinely want to change course. Among the many points made by those students is an echo of what the Government have said many timesthat we now live in a constantly shifting global economy, that qualifications relevant even 10 years ago may no longer be relevant in the workplace today and that ELQs are essential to keep up with the pace.
	It would be wrong to prejudge the outcome of our inquiry, but tonight is an opportunity to examine the context in which this somewhat surprising announcement was made. After all, there was no consultation about the principle behind the initial announcement. The Secretary of State was very honest, as he always is, when he said that he had asked HEFCE to find money to fund another 20,000 full-time equivalent students. That is where the 100 million figure came from. The Secretary of State has done a valiant job in defending a policy that HEFCEnot the Governmentdecided. It was HEFCE's answer to the problem of the extra 20,000 students. Tonight we have had a recognition of the fact that there will be a 100 million cut for mostly part-time students studying for ELQs. That will be a cut in order to finance an expansion in the number of students elsewhere by 20,000. That has been fully established.
	The Secretary of State has produced no research evidence to support his strongly held views that the change will not damage the drive for new skills in the workplace. As other hon. Members have commentedthe hon. Member for Havant (Mr. Willetts) made the point in his opening remarkswhy choose now, when there will be a review in 2009? We recognise that there has to be a fundamental look at how we fund higher education and at what we want it to deliver in the 21st century, but why pick out such a small bitmerely 100 million of the 7.1 billion that is spent on teaching in higher education?
	I have listened carefully to the arguments that the Government have presented to our Committee as well as those that they have made tonight. We have no problem with Lord Leitch's analysis that 40 per cent. of adults need to be at level 4 by 2020. We believe that that is a sound policy. We accept that to achieve that target we will have to increase significantly the number of students studying for the first time at that level, as the hon. Member for City of Durham (Dr. Blackman-Woods) said. We accept that in order to support a more highly educated and skilled work force employers will need to contribute to developing that pool of labour, as the hon. Member for Milton Keynes, South-West said. We accept that as far as the overall spend in higher education is concerned, there will not be a net reduction but simply a redistribution of the resources. We can accept all those facts without questioning them deeply.
	There is a question about whether the Secretary of State has fully understood the nature of the part-time student market, and in particular the market for existing graduates to retrain in new areas where they can, we hope, become more economically active. I am sure that the Minister for Lifelong Learning, Further and Higher Education would agree it would be absurd to develop a policy whereby initial qualifications, provided they were at level 4, were sufficient to meet the hugely complex and ever-changing demands of a modern economy. That would be nonsense. I do not believe that the Minister believes that at all. How does the ELQ policy fit into a broader Government strategy of not simply upskillingwhich we all accept is a good policybut reskilling at whatever level is necessary to make individuals more economically active and productive?
	There is a worry that by simply applying the Leitch upskilling target we are in danger of making the same mistake as when Tony Blair set the target for 50 per cent. of 18 to 25-year-olds to go to university. A drive for quantity rather than the appropriateness of the qualifications is a mistake that we should not make again. Far too many of those who have graduated over the past 10 years have qualifications that they simply cannot use or they find themselves employed in positions that require at best a level 3 and, more often, a level 2 qualification. How on earth do those people who become caught in a qualifications trap get out of it without reskilling? ELQs are an essential element of that reskilling.
	Of course, the Minister can talk about the ambassador's wife taking a course in French or some other mythical example, but as the right hon. Member for Holborn and St. Pancras (Frank Dobson) pointed out, those who are studying in the marketplace that we are discussing are serious students. I ask the Minister to set out the Government's policy on reskilling rather than simply upskilling.
	No doubt the Minister will point out the many exemptionssuch as medicine, economics, law and psychology. However, I ask him when the policy suddenly arose. If the public purse in education is now to be used to influence people's choice of course and the outcome to meet national skills needs, why does the policy not apply at level 4? That would be more appropriate. What principal difference means that a student is allowed carte blanche to study wherever he likes for his first degree, provided the institution will accept him, but not if he wants to retrain to become economically active? There is a difference between the two policies.
	Like many who reacted strongly to the attacks of the right hon. Member for Norwich, South (Mr. Clarke) on mediaeval historians, I have a real unease about the state deciding what students should study

Boris Johnson: Hear, hear.

Phil Willis: Hear, hear, says the mayoral candidate from a sedentary position. However, my serious point is that this is a legitimate subject for debate. The debate is important in the broader context of what we should expect from higher education, given that no party can devote limitless resources to it. However, the policy under discussion is not being applied to the vast majority of post-18 graduates, so why are the Government picking on one small group of students?
	Finally, I return to the fundamental question, which the hon. Member for Milton Keynes, South-West did not answer: should employers contribute to training costs? Many employees want to do ELQ courses because they do not like their current jobs and want to move elsewhere. What employer would want to pour money into helping dissatisfied workers to get skills so that they can go somewhere else? I do not know of any. It is not a sensible description of the process, and I am sure that it is not what the hon. Lady meant.
	In his brilliant speech to the inaugural conference of Universities UK, Richard Lambert asked why it was thought that employers would take that approach. The Government say that they must do so to ensure that people have the skills they need, but employers have responded by saying that they would simply go to the EU, as there is now a global market in labour. The task of ensuring that our nation's work force have the necessary generic skills lies with the Government, and the necessary funding must come from the taxes that we pay to the state.
	The debate is important, and the motion under consideration is reasonable. The House has responded to it in a reasonable way, and I trust that the Minister winding up will do likewise. I am sure that he will.

Hywel Francis: As ever, it is a particular pleasure to follow the hon. Member for Harrogate and Knaresborough (Mr. Willis). He has always been a champion of adult learners, and I welcome the inquiry that his Select Committee is conducting.
	At the outset, I should declare the interests that reveal my enthusiasm for adult learning. I am an honorary life member of the National Institute of Adult Continuing Education, and I am also a vice-president of Carers UK. I want to say something later about the relationship between carers and adult learners.
	I welcome the debate because it offers another opportunity for the Government to showcase their achievements in higher education and lifelong learning, especially when it comes to widening, deepening and increasing participation. It also gives us an opportunity to remind the House about the Government's commitment to implement the Leitch report. However, I am one of those who counsels caution in respect of the proposal to withdraw funding for ELQ students, and I am among the signatories of early-day motion 317.
	I wish to put it on record that, of course, I endorse the Government's contention that there needs to be a reprioritisation of resources so that access and participation can be widened and rendered more equitable, and so that quality can be maintained. However, I worry about the unintended consequences of the proposal. We have heard about them already this evening, and they have been described eloquently by the Open university, Birkbeck college, NIACE and the think-tank, Million Plus. The consequences have also been set out by the CBI director general, Richard Lambert, who has been quoted several times in the debate.
	I tend to agree with those critics who worry that the proposals will distortclearly unintentionallythe Leitch agenda. They have noted that there are risks that the proposals will destabilise the part-time HE sector, have an unequal impact on certain institutions and disproportionately affect certain adult learners. It is that final risk about which I want to speak now, especially as it relates to carers.
	As chairman of the all-party carers group I take a particular interest in the circumstances of carers, and my Carers (Equal Opportunities) Act 2004 made special provision to ensure that carers were encouraged to pursue lifelong learning. What will happen when a carer happens to be a graduate and is unable to upskill after years, sometimes decades, of enforced caring?
	I come to this debate as a strong supporter of my Government, but one who is an enthusiastic supporter of Birkbeck, the Open university and all adult part-time learners. My right hon. Friend the Secretary of State has rightly acknowledged tonight that such admirable institutions need time to adjust to the changing challenges of our time and to ensure that we have a more radical and enabling higher education system. The House should welcome that commitment as a genuine gesture of support and of his willingness to await the results of the HEFCE inquiry. I urge him to go further and allow even more time for change to take place and to consider the suggestions made by the OU and Birkbeck, particularly that the proposals should be withdrawn or at least that the money saved should be reinvested specifically in institutions that support the skills development of mature part-time learners.
	May I finally urge the Secretary of State to consider consulting Education Ministers in the devolved institutions, who are clearly committed to widening participation, as we are here in England, but who do not appear to be going down this road? I urge my right hon. Friend seriously to consider consulting HE Ministers to strengthen wider participation rather than weaken it.

Boris Johnson: When it was my privilege to help shadow the Minister for Lifelong Learning, Further and Higher Education, I had the pleasure of giving the founders day address at Birkbeck college. I also saw a great deal of the wonderful work done in universities across London. It is also one of the most important jobs of the Mayor of London to speak up for education in London, to use all his powers to defend London universities and entrench the position of London as the knowledge centre of Europe, and to make sure that we continue to have a constellation of first-class institutions that continue to attract huge numbers of foreign students from across the world and contribute healthily to the 1.5 billion in fees that are so vital to the higher education economy of this country.
	At the risk of being partisan, I think it is incredible that the current Mayor of London has said nothing about this issue or about cuts that profoundly affect higher education in this city. I do not wish to do him a disservice; I have not heard him say anything about the issue in the past few weeks. Thousands of people come to London to start their lives afresh and often a major part of that reinvention is a process of re-education and acquiring new skills. That is why there are so many institutions in London whose bread-and-butter work is to teach those who already hold a qualification at an equivalent or higher level. They include City of Westminster college, Birkbeck, South Thames college, the Conservatoire for Dance and Drama, London Business School, Open university, the Institute of Cancer Research, the School of Pharmacy, the London School of Hygiene and Tropical Medicine, City university, Thames Valley university, Lewisham college, the University of East London and London Metropolitan university. Many of these institutions will have to rethink radically their provision in order to survive. Nine out of 10 of the most seriously affected higher education institutions and 54 per cent. of students taking equivalent or lower qualifications are in London. This move is seriously regressive for London. It is injurious to the interests of thousands of potential learners across the city. As my hon. Friend the Member for Havant (Mr. Willetts) has said, it is particularly damaging to women who wish to acquire further qualifications after a change of career. It frustrates opportunity, stifles aspiration, and sends a negative message to those thinking of pursuing higher education in London. It does nothing to help our status as the centre of the global knowledge economy.
	As was pointed out by my hon. Friends, and by the hon. Member for Bristol, West (Stephen Williams), who speaks for the Liberal Democrats, the cuts are completely antithetical to the Leitch agenda and the Government's previous gospel on the subject. Last September, at the Universities UK conference, the Secretary of State gave a speech underlining the need for universities to offer flexible part-time provision, in order to help hit the target of 40 per cent. of the work force holding an HE-level qualification by 2020. Many London institutions are uniquely placed to deliver that.
	Birkbeck has specialised in the high-quality, research-led teaching of working people since 1823. In 2007, it broke all records for its recruitment, and it was praised by its students for the third year running for delivering an exceptional, high-quality education. As a result of the flexible style of its provision, a third of Birkbeck's students are equivalent or lower qualification students, yet under the new measure they will pay for that. It is estimated that 6,000 or 7,000 people will be affected. The Government's cuts will directly limit the potential of a great institution, and the potential of thousands of students to change their lives. London is disproportionately affected by the cuts. I urge the Secretary of State to rethink this arbitrary decision, and to instead incorporate the proposal in the wider review of fees expected in 2009, as my hon. Friend the Member for Havant and Members of all parties have argued.
	I think it incredible that we will allow Scottish MPs to vote on cutting higher education funding for English students in a manner that will not apply in Scotland. It is an infamous measure, and in all conscience they should abstain from voting on it. It threatens to discriminate against the very people whom we are trying to help.

Angus MacNeil: Will the hon. Gentleman give way?

Boris Johnson: I am sorry, I have wound up my speech.

John Hayes: The debate on ELQ funding has surely shown the House at its best, focusing on an issue of real concern in a measured, non-partisan way. It is all too easy for politicians to follow Napoleon's advice to Never interrupt your enemy when he is making a mistake. That course of action would do for the moment, but it would surely be found wanting over time. What really counts are the interests of thousands of potential learners, whose opportunities will be stifled, and whose life chances will be limited unless Ministers change their minds about the proposal.
	Just a few weeks ago, the Prime Minister said, on the subject of learning, that we must provide
	not one chance but second, third, fourth and lifelong chances
	in a society that places
	the highest possible cultural value upon learning.
	The proposal's impact flies in the face of that aspiration. I know that Ministers take the issue seriously, and I do not for a moment accuse them of anything other than good will in their aspirations for higher education, but surely the tone and tenor of tonight's debate will oblige them to think again, taking into account the early-day motion, the debate, and the representations that they have received from all parts of the House, country and sector.
	As my hon. Friend the Member for Havant (Mr. Willetts) said, supported by the hon. Member for Harrogate and Knaresborough (Mr. Willis), no consultation took place before the proposal was made. There was no lobby or campaign to bring about the change. I repeat that there was no consultation on the principle. The Secretary of State implies that a consultation is under way, and he is of course right, but it is a consultation on how to implement a proposal that has already been made, as the Minister for Lifelong Learning, Further and Higher Education told me in answer to a written parliamentary question. In other words, rather than asking those who know best whether the change should happen, the Secretary of State will consult them on how to limit the damage when it does.
	Two days after the Secretary of State announced the withdrawal of ELQ funding, it was reported that he wanted to re-educate the work force with
	university evening classes, weekend courses and part-time degrees,
	yet as we heard in today's debate, it is the very institutions that lead the way in providing flexible learning that will be most damaged. As the right hon. Member for Holborn and St. Pancras (Frank Dobson) said, Birkbeck college in London is among those institutions. A third of students at Birkbeck college, which specialises, as he said, in part-time evening courses, are ELQ students. The proposal means severe cuts to the part-time learning that the Secretary of State claims to champion.
	Earlier in the debate we heard the Secretary of State pouring cold water on some of HEFCE's figures and statements, which was quite a shocking thing for him to do, but nevertheless HEFCE estimates that 20 per cent. of part-time students in England will be unfunded from 2008-09. As my hon. Friend the Member for North-East Milton Keynes (Mr. Lancaster) said in a stout defence of the Open universitynot for the first time, he was its champion in the Chamber tonightthe OU will be severely affected by the proposal. It was good to hear my hon. Friend speaking up for Harold Wilson's brainchild. By contrast, the hon. Member for Milton Keynes, South-West (Dr. Starkey)I do not mean to be unnecessarily unkind to the hon. Lady, and I emphasise the word unnecessarilymanaged, with remarkable dexterity, to skate on thin ice and dance on the head of a pin at the same time.
	One of the other institutions that will be affected is the Cambridge Institute of Continuing Education, where more than 80 per cent. of students already have a first degree or equivalent qualification.
	It is not only those high profile institutions that will be detrimentally affected. Universities and colleges should work to widen access because education is a tool to build greater social mobility and a more just nation. Many of the institutions that have the best track record in attracting students from disadvantaged backgrounds will bear the brunt of the cuts. As the hon. Member for Bristol, West (Stephen Williams) said, FE colleges and specialist provision will suffer, as well as high profile universities.
	HEFCE suggests that, even allowing for the exemptions, institutions such as the university of Wolverhampton, which was mentioned by the hon. Member for Wolverhampton, South-West (Rob Marris), who is not in his place, and the university of East London, both of which attract nearly 40 per cent. of their students from the bottom three socio-economic groups, will lose millions in funding as a result of the Minister's proposals.
	London Metropolitan university was mentioned by my hon. Friend the Member for Henley (Mr. Johnson), who is a champion for London and all that is best about our capital city. It is estimated that 97.5 per cent. of the students at that university come from state schools and it will be among the biggest losers.
	HEFCE says that the changes could destabilise efforts to increase the amount of part-time and flexible learning. The policy directly contradicts the aim of widening participation.
	Ministers say that the 100 million saving will be recycled within the HE sector to first degree students, but the House is left to guess how or where this will happen and who will benefit. It is not in the letter that the Secretary of State sent to HEFCE. There is barely a mention of the 20 million being redirected to help the students whom he mentioned tonight. We can only assume that he had not made his mind up then or does not know now. I hesitate to say this because I do not want to offend anyone in the House, but I wonder whether that was a rabbit drawn from a hat to cover the Secretary of State's embarrassment once he realised how unpopular and how unacceptable the proposal was among Opposition Members, the representatives of HE and his colleagues.
	Ministers make much of the Leitch review of skills, but Lord Leitch concludes that demographic change means we must reskill and not just upskill the existing work force. The proposal undoubtedly makes reskilling harder for all and impossible for many. The exemptions are arbitrary and inconsistent. Vets will be exempt, but not pharmacists. Land management will continue to be supported, but not law or business studies. Many professional qualifications will be damaged. In 2005-06 21 per cent. of students studying for science, technology and engineering degrees were ELQ students.

John Denham: indicated dissent.

John Hayes: That information comes from a Minister's written answer, so I am surprised that the Secretary of State is shaking his head.
	Such qualifications have a direct impact on Britain's economic chancesand the chances of countless of our countrymen.
	The London Business School will be the fifth-hardest hit institution as a result of the change. No wonder the director general of the CBI is concerned; he says that it will damage management and business education. If we are to meet the skills needs of the 21st century, we must enable people to access education in a way and at a pace right for them. That should mean more part-time and distance learning and more modular courses, but the proposals are injurious to those ambitions.
	Unless the decision is reviewed, the route back into learning will be harder to travel. Mothers who want to return to work and need to reskill will find that they will not be funded; workers who have been made redundant because of technological change will not find funding for reskilling. So much for the Prime Minister's talk of second, third or lifelong chances. So much for the culture of learning in which the Minister tells us he believes.
	The early-day motion on which the motion is based was signed by more than 200 Members across the House. It is straightforward, measured and clear. The Opposition have not sought to add or subtract from it; we have simply reproduced it for the House to consider tonight. We just want Ministers to look at ways in which damagedamage to lifelong learning, to the Leitch agenda, to objectives that are broadly shared across the Chambercould be minimised. We believe that it would be better to defer implementation and refer the issue to the 2009 fees and funding commission. Surely that is fair; surely that is right.
	Occasionally, an opportunity arises for Members across the House to speak with one voice. This is such an occasion, and voting for the motion is such an opportunity. The Government's proposal to cut funding for thousands of learners is simply unwarranted, unwelcome and unwanted. I urge Members who genuinely believe in the efficacy of education, in lifelong learning and in second, third and lifelong chancesand I know that Members across the Chamber doto join me and my hon. Friends in voting for the motion.

Bill Rammell: We have genuinely had an exceedingly good debate about an important issue. What has come across strongly is that across the House there is a genuine commitment on these important issues.
	I strongly believe that the issue of part-timers and adults in higher education is hugely important to every community in the country and to us as a nation. As Sandy Leitch's thought-provoking, challenging analysis of our skills needs until the end of the next decade made clear, if we are to remain competitive, we need to do much better in getting people to the highest skills levels. He identified that to be globally competitive we need to increase the proportion of the working-age population with a higher education qualification from 29 per cent. today to 40 per cent. by the end of the next decade.
	That is a challenging target. Even if we achieve it, it will move us from 10th place in the international league table just into the upper quartile. The target is stiff and challenging; that is why as a country and as a Government we have to ensure that the highest priority for public, taxpayers' funding is people who are not yet at the first-degree level; that is why that has to come first.

David Chaytor: Does my hon. Friend not think it significant that in the speeches from the Conservative and Liberal Democrat Front Benches there was not a single mention of the 70 per cent. of the work force who do not have a university degree? Does he think that they would have turned out in such large numbers had we been talking about apprenticeships or national vocational qualification level 2 or 3? They would not have done.

Bill Rammell: As usual on these matters, my hon. Friend is absolutely right. We have heard nothing from the Conservatives about the 20 million people in the adult work force, 10 million of whom are women, who have not got to that first degree level, and we should hear more about that.

Boris Johnson: Can the Minister, for whom I have the highest regard, explain exactly how he will increase opportunities for people who have not yet had a degree by taking away opportunities from those who might go on to acquire further qualifications?

Bill Rammell: We are redirecting 100 million, which is 0.2 per cent. of the higher education budget, in the first year of the operation of this new system, and we are redirecting that 100 million towards people20,000 of them by the end of the three-year comprehensive spending review periodwho are not yet at first degree level. In order to meet that stiff and challenging target, adult learning and part-time study are important; that is why the Government have been so keen and determined to increase both in higher education.
	Words, including some of those that we heard from Opposition Members, are cheap, but our commitment has been reflected not in words but in actions. We have also been treated to some words intended to suggest that the Government are somehow trying to persecute the Open university. Let me make it abundantly clear for the record that nothing could be further from the truth. I say this with genuine conviction. I believe that the Open university is one of the finest creations of any Labour Government; that is why that institution has such strong support from my right hon. and hon. Friends. I have to say that Conservative support for the Open university was not as apparent at its inception, as my right hon. Friend the Secretary of State pointed out when he quoted the late Iain Macleod, who, when he spoke for the Conservatives, described the idea of the Open university as blithering nonsense. Let us bring it further up to date. My right hon. Friend might have added that as Education Secretary in 1970, Margaret Thatcher had to struggle hard against pressure from her own Back Benchers in order, as she said her biography, to save the Open university. This commitment to and support for the Open university is a little late and opportunistic.
	Nevertheless, the Labour partythe party of this Governmentcreated the Open university and we continue to support it. We retain, importantly, our commitment to part-time study as a route to individual betterment for people who, for whatever reason, have missed out on the chance of higher education first time round.

John Hayes: Could the hon. Gentleman be clear about what consultation took place with the Open university, Birkbeck and others before the letter was sent from the Secretary of State to HEFCE suggesting these measures?

Bill Rammell: The Secretary of State has made the position clear. We set out the policy, we have been consulting on its detail, and that consultation has not concluded. HEFCE and Ministers have been listening to the points that have been made.
	Under this Government, part-time student numbers have risen by no less than 40 per cent.faster than numbers of full-timers. That has happened because we have continued with the strong and long Labour tradition of support for mature students in higher education and for the part-time mode that is so important to them. That is why this Labour Government were the first Government to bring in part-time student support. It is why, two years ago, we increased the part-time student grant by 27 per cent., and why in each of the past two years we have allocated an additional 40 million, through the funding council, to support part-time provision. Compare and contrast that with the record of the last Conservative Government, of whom the hon. Member for Havant (Mr. Willetts) was a member, when there was precisely no incentive for higher education institutions to recruit part-timers and no support to allow learners to study part-time.

David Willetts: But does the Minister not understand that his proposals will damage part-time students who do not have a degree already, as well as those who have a degree? Those proposals will make part-time courses less viable, they threaten existing part-time provision, which means those without degrees suffer, and they will limit the range of students studying part-time courses. He is undermining his own policy through those ill-conceived proposals.

Bill Rammell: That is emphatically not the case. I urge the hon. Gentleman, whose views I normally respect, to look at the detail of the proposals, and to recognise the fact that we are increasing the part-time premium to institutions such as the Open university through the Higher Education Funding Council. Institutions such as the Open university and Birkbeck will be exceedingly well placed to take up the additional growth from the redirected 100 million, and the 2 per cent. above inflation increase in the overall higher education budget each year, in order to make good any loss in respect of ELQ students.
	We have invested in and supported part-timers; the previous Government did nothing whatsoever to support them. Let us also remember what happened to overall higher education funding under the previous Government. During the last seven years of that Government, there was a 36 per cent. real terms cut in higher education funding. When one talks to vice-chancellors and lecturers, one finds that they very much remember those days. In the past 10 years, we have seen the biggest increase in higher education funding for 40 years. Since this Government came to power, we have increased funding by 23 per cent. in real terms, and for each of the coming three years of the CSR period, there will be a further increase of 2 per cent. above inflation. This Government are not cutting funding for higher education; we are maintaining and expanding higher education. What we are doing, rightly, is redirecting 1.5 per cent. of the overall higher education budget by the end of year three in order to give a chance of a university education to more than 20,000 full-time students who would never have had that opportunity otherwise.

Adam Afriyie: The Minister is throwing out a lot of stats, and going back 20 or 30 years in some cases, but could he explain clearly to this House which bit of the motion he disagrees with?

Bill Rammell: I disagree with the bit of the motion that says that the Government should ensure that we minimise the impact on institutions such as the Open university and Birkbeck because that is exactly what we have already been seeking to do through the consultation. We have sought to ensure that those institutions are able to benefit from the growth that will come from the redirected 100 million and the overall increase in higher education funding. I shall return to that point later.
	I shall now comment specifically on some of the points that have been raised during the debate. The hon. Member for Havant made a significant issue of the proportion of women who will be affected by the policy. Let me be clear and state for the record that 47 per cent. of ELQ students are women, just as 47 per cent. of non-ELQ students are women. It is also the case, as my hon. Friend the Member for Bury, North (Mr. Chaytor) alluded to, that tens of millions of women in the adult work force do not have a first degree, and ensuring that they receive funding will be a priority under the proposals.
	The hon. Member for Havant was challenged by my hon. Friend the Member for Blackpool, South (Mr. Marsden) to say what he would he do if he were faced with this decision, and on where the money would come from, and he said quite simply that he would not make this decision. That is fine; such a priority can be made, but if another decision were taken, the Opposition would have to go out and explain it to the 20,000 students who would not have their first degree funded as a result.
	The hon. Gentleman also made a point about our proposals being contrary to what Sandy Leitch has recommended. I do not believe that that is the case. The proposals will give significant opportunities to enable people to reskilll through employer co-funded courses, vocational foundation degrees and whole range of exempted subjects.

Kelvin Hopkins: As I said at the beginning of the debate, if the Tories were honest, they would say, Let's raise taxes and have it all. That is what I believe.

Bill Rammell: I know from many conversations that my hon. Friend believes that. I will leave it at that.
	More interesting was the intervention from the hon. Member for Harrogate and Knaresborough (Mr. Willis), who chairs the Select Committee. He challenged the Conservative party to make a commitment that, if a Conservative Government were elected

Stephen Pound: Heaven forfend.

Bill Rammell: Indeed. The Chairman of the Select Committee challenged Conservative Members to make a commitment that any student who had a first degree could get a funded ELQ. The hon. Member for Havant could not make that commitment and urged us simply to wait for the results of the commission in 2009. We therefore have principled opposition, but only for a year. Indeed, we have political opportunism that masquerades as principled opposition on the issue.
	The hon. Member for Bristol, West (Stephen Williams), whom I welcome to his new position and responsibilities, mentioned foundation degree awarding powers for further education colleges. My memory of that change was of significantly more noise and opposition compared with the reaction to the proposals that we are introducing today. Yet now that the change has been made, we hear not a murmur from the sector. That demonstrates that we sometimes have to do what is right, consult and take people with us.

Stephen Williams: The reason for the noise from the sector was that the Government had not consulted it. Matters improved and there is not so much noise now because we went through a legislative process in this place and significantly amended the original proposals. We will not get that chance with tonight's proposal.

Bill Rammell: The same principle applies. One presents a proposition and consults about the detailwe did that previously and we are doing it now. I appreciate that the hon. Gentleman is new to the Front Bench, but he is seriously misinformed about the current position. He lamented the fact that ELQs would now be unregulated and that higher fees could be charged, but that is the current position. Institutions can already charge higher fees for second degrees. Given the competitive market, I believe that universities will think long and hard before raising fees. They know that significant other sources of funding will come forward as a result of the changes.
	I respect the integrity and commitment of my right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson). Let me reassure him about Birkbeck college. I have met representatives of Birkbeck twice and I spoke at its founder's day before Christmas. I have been impressed by the college's willingness to engage with the Higher Education Funding Council and examine the way in which it can reorientate the organisation to take up the opportunities that are on offer. It is a model for the way in which we expect higher education institutions to respond.
	The hon. Member for North-East Milton Keynes (Mr. Lancaster) claimed that the changes would result in the Open university losing 49 million in funding. That is categorically untrue. It does not serve the cause of the argument to make such claims. My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) passionately supports the Open university, as was demonstrated when she made exactly the same arguments in private to me as she made on the Floor of the House.
	Let me conclude by making the position abundantly clear. First, there is no overall reduction in funding for higher education. On the contrary, it will continue to increase. Secondly, funding for students taking ELQs in strategically important and vulnerable subjects will be protected. Thirdly, students taking foundation degrees will be protected. Fourthly, funding for employer co-funded courses will be protected. Finally and crucially, no institution's grant will be reduced in cash terms in the next three years while the new policy is introduced. That is an important message to Birkbeck and the Open university.
	I strongly believe that institutions such as the Open university and Birkbeck are well placedindeed, given their records, better placed than mostto take advantage of the opportunities and recoup their share of the 100 million that we are redistributing. The proposal is about priorities. The needs and interests of first-time students

Patrick McLoughlin: rose in his place and claimed to move, That the Question be now put.
	 Question, That the Question be now put,  put and agreed to.

Question put accordingly, That the original words stand part of the Question:
	 The House divided: Ayes 238, Noes 291.

Question accordingly negatived.
	 Question, That the proposed words be there added,  put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):
	 The House divided: Ayes 287, Noes 233.

Question accordingly agreed to.
	Mr Speaker  forthwith declared the main Question, as amended, to be agreed to.
	 Resolved,
	That this House supports the Government's decision to reprioritise some funding currently supporting the teaching of higher education students who already hold an equivalent or higher qualification, in order to enable approximately 20,000 additional full-time equivalent students to enter higher education for the first time; notes the Higher Education Funding Council for England (HEFCE) consultation which proposes that transitional protection will be put into place to ensure that no provider loses in cash terms, that the change to the funding methodology will protect Foundation Degrees, employer co-financed programmes, and strategic subjects, and that the premium paid to support the costs of part-time provision will be increased; notes that HEFCE and Ministers have been engaging constructively with the Open University and Birkbeck on this issue; and believes that the Government is right to give priority to first-time students.

PETITION

Prostitution

Fiona Mactaggart: With the House's leave, I would like to present a petition that has been signed online by 176 people and has been presented to the Leader of the House. As we do not currently allow online petitions, I have collected some human signatures too.
	The petition states:
	The Petition of the undersigned, declares that the current laws on Prostitution in the UK are outdated for the twenty-first century. The problems with trafficking in the UK demonstrate how the current laws do not assist in reducing prostitution nor do they help to protect vulnerable women who have been coerced or in many instances forced into prostitution. Although slavery was abolished in the UK almost 200 years ago, slavery still exists for many women in prostitution in the UK. We believe that serious action is now needed to combat this horrific human rights abuse.
	The Petitioners therefore request that the House of Commons urges the government to review the current laws on the supply of sex and prostitution. The undersigned request that new laws are introduced following the bold stance taken by the Swedish government in 1999 which made the demand, rather than the supply, illegal. We believe that prostitution is inherently an abuse of women and does not exist to allow women freedom of choice, but is a symptom of the lack of choice for many women. We believe that prostitution will only be reduced in the UK if the demand for prostitutes is tackled in a thorough and comprehensive manner.
	And the Petitioners remain, etc.

CARBON MONOXIDE DETECTORS

Motion made, and Question proposed, That this House do now adjourn. [Mr. Alan Campbell.]

Tom Levitt: On 28 January 2004 it snowed in High Peakthat is not unusual at this time of year. The snow was so heavy that school buses were summoned and children sent home. My constituent, Mary Ann Bailey, then aged 15, went to a friend's home in Hadfield, near Glossop, for the afternoon, with others. At 4.40 that afternoon the emergency services found Mary Ann and a friend, Martin Taylor, dead at their friend's home.
	The previous week a valve had been replaced on a gas boiler in the room below where the young people died. It had been incorrectly fitted, by one Jason Barton, and as a result the gas pressure was too high and the gas was not burning efficiently. Carbon monoxide was being produced by the boiler and it killed the two young people. Two years later a jury failed to agreefor a second timeon a charge of manslaughter against Mr. Barton for his negligence. Instead, he was convicted of a breach of health and safety legislation. He was fined just 2,000 and had his CORGI registration removed.
	The Health and Safety Executive stated in evidence that 36 properties where Mr. Barton had worked had gas installations which rendered them either at risk or in immediate danger; and that 120 acts of faulty workmanship had been identified in Mr. Barton's work over just 12 months. The judge at Nottingham Crown court said that Barton should have gone to jail. The judge also regretted that the law said that Barton could only be fined, and that the fine had to relate to his ability to pay. Prosecutions for negligence in this field too often fail to convict and I know that that is of great concern to those interested in gas safety.
	In November 2007, another constituent, pensioner John Froggatt, sat down with a friend to share a whisky in a caravan in Bamford in the Hope valley. Again it was a cold High Peak night. Although he did not intend to stay out for long, the gas heater was switched on for warmth. Two days later, the two missing pensioners' bodies were found. It is believed that the heater was in good working order, but that a mouse had built its nest in the flue over the summer, preventing the products of combustion from escaping from the caravan. Carbon monoxide had built up and killed both men in what was likely to have been a slow, but relatively painless death.

Bob Spink: I congratulate the hon. Gentleman on presenting this important debate and the caring way in which he is dealing with these terrible tragedies. Our hearts go out to him and his constituents.
	The hon. Gentleman knows that I have in my constituency arguably the best, and certainly the largest, park home site in the country on Canvey Island. Park homes and caravan owners need to be especially vigilant about carbon monoxide. Does he agree that it is vital that appliances are properly serviced and that caravan owners purchase an audible carbon monoxide alarm to act as a second line of defence against CO poisoning?

Tom Levitt: The hon. Gentleman is right, and if he will bear with me, I will list the demands that I wish to make of my hon. Friend the Minister.
	Ten years ago one person died each week from CO poisoning on average; today it is one a fortnight across the country as a whole. But four in four years in High Peak alone is way above the average. Last year only eight people died from CO produced from mains piped gasmaking it the best year on recordbut proportionately higher numbers of deaths arising from CO are produced from the burning of coal, wood, oil and other domestic fuels. How can it be justified that gas is subject to proper regulation and licensing of fitters, but those other fuels are not? And why is the enforcement of high standards of gas fitting so inadequate?
	All deaths from CO, including all four of those in High Peak recently, have one thing in commonthey were avoidable. None of those four would have died had the house or caravan concerned been fitted with CO detectors and alarms. I will return to that point later. Suffice it to say for now that more than half of mains gas-related carbon monoxide incidents over the years come from open flue gas appliances. Open flue gas central heating boilers, of a type which have not been installed since 1993 but which are still common in older properties, account for more than half of all deaths from CO poisoning in that time, says British Gas.
	CO is a highly toxic, colourless, odourless gas. It is produced by the combustion of fuel in poorly ventilated areas. It is the potent element of car exhaust emissions in confined spaces, which explains the use of car exhaust as a means of suicide. I occasionally find my past as a biology teacher of use in this place and I can tell the House that CO binds to haemoglobin in the blood as carboxyhaemoglobin 200 times more strongly than oxygen. Normally, haemoglobin binds loosely with oxygen in the lungs and then releases oxygen to the brain, muscles and other tissues in response to an oxygen deficit. Carboxyhaemoglobin, by contrast, is a stable compound that does not break down readily at all.
	In air with 21 per cent. oxygen, which is the normal level, a CO level of just 0.1 per cent. can cause half of the haemoglobin in the blood to bind permanently with CO, which means that the blood rapidly and permanently becomes unable to deliver sufficient oxygen to our muscles and brain. Last October in the House of Lords I joined David and Mary Jane Worswick, the parents of Mary Ann Bailey, at an event to mark the launch of the second carbon monoxide awareness week. I expected to meet other bereaved families, but there were actually very few of them. Most of the dozens of people present were victims of non-lethal CO poisoning.
	Some 200 cases of such poisoning are identified every year but many others go undiagnosed, because doctors do not routinely check for CO poisoning, because dead bodies are not routinely checked for CO poisoning as they are in France, and because symptoms vary from person to person and are easily confused with other causes. For example, 90 per cent. of cases of carbon monoxide poisoning produce headaches, 50 per cent. cause nausea, 50 per cent. cause dizziness, 30 per cent. cause tiredness, and flu-like symptoms are reported in 20 per cent. of cases. In more serious cases palpitations are found as well as chest pain. Collapse, unconsciousness and death follow.
	Those attending the event in the Lords exhibited a variety of medical conditions associated with brain damage due to oxygen starvation caused by CO poisoning. Many had physical disabilities such as being unable to walk and many had lost their jobs through disability, while some reported severe personality problems. Patient UK confirms that 200 people a year survive significant CO poisoning but long-term damage includes kidney failure, heart attack, blindness due to retinal bleeding, brain damage due to swelling of the brain, loss of memory, personality changes, irritability and incontinence.
	CO awareness week was launched in 2006 with a view to raising awareness of CO poisoning among medical practitioners and the general public, thereby tackling its causes. University of London research published by the Health and Safety Executive in 2006 shows that 23 per cent. of homesone in fourhave one or more defective gas appliances. Some 8 per cent. of homes2 million houses, which are home to 4.5 million peopleare at risk of dangerous levels of CO while 45 per cent. of homes had no information on or awareness of the dangers of CO. Problem appliances are most likely to be found in the homes of vulnerable people.
	CORGI has also published research. It found that 28 per cent. of CO deaths are caused by faulty or poorly maintained appliances. It confirmed that CO poisoning is not spread evenly across society, hitting some disproportionately with 27 per cent. of incidents occurring in rented accommodation while 50 per cent. of victims are elderly or children. More than half of all incidents, or 53 per cent., take place between November and February each year.
	British Gas reports that residents of flats and terraced houses who maintain their equipment properly are nevertheless subject to an additional risk of CO poisoning from poorly maintained equipment in neighbouring properties, with the CO coming through the walls. Some 55,000 businesses in this country are registered with CORGI, including many sole traders, which represents about 120,000 gas fitters. CORGI says that perhaps 20,000 people in this country carry out gas fitting, servicing and repair but are not registered. Some of those people will be qualified and their registration will have lapsed, but many will be untrained or inadequately trained, while some will have been removed from the CORGI register for negligence or malpractice. Those 20,000 people clearly represent a much higher risk to the public than CORGI-registered operators. It has been calculated that unregistered and possibly illegal gas workers are 32 times more likely to be involved in a serious CO incident than a CORGI-registered installer.
	British Gas reports that, of the 43 million gas appliances in this country, 14 million are gas boilers, of which 3.4 million are serviced under contract by British Gas's 8,600 qualified engineers. Another 3.4 million appliances are serviced regularly by other CORGI-registered operators. That means that 7 million gas appliances are not serviced at all, are not serviced regularly or are serviced by an unregistered engineer who is not qualified to do the work. To complement those figures, 3 million gas appliances are sold every year, but CORGI operatives install only half of them.
	I welcome the news that, as of last week, the company Part Centrea major supplier of materials to the gas fitting industrywill supply parts only to purchasers who have a CORGI registration. I call on other companies to follow suit, and for the scheme to be extended to complete appliances and to appliances that burn other carbon fuels. I commend to the Minister early-day motion 462 tabled by the hon. Member for Colchester (Bob Russell) on this issue.
	I recently carried out a survey of residents in High Peak. We have had about 650 replies but some arrived too late to be included in my analysis. Of those replying, 95 per cent. had gas boilers and 20 per cent. used other carbon fuels, so it is clear that some people have more than one system. In addition, 92 per cent. had smoke detectors in their homes, while only 34 per cent. had CO detectors. In fact, that compares well with the national figures of 83 per cent. for smoke alarms and 21 per cent. for CO alarms.
	Only 3 per cent. of respondents to my survey had a CO detector that was portable for holiday use, and I remind the House that two British children died from CO poisoning in an incident in Corfu a couple of years ago. Thanks to the organisation CO-Awareness, I am now able to distribute free of charge 10 CO monitors with audible alarms to constituents who replied to the questionnaire and who do not already have such an alarm. I shall be giving them out in the next few weeks.

Fraser Kemp: I thank my hon. Friend for giving way. Many hon. Members have had to deal with the consequences of CO poisoning, and many people have been killed by what is a silent killer. Will he comment on the recent initiative in my constituency that was launched by Councillor Joan Carthy, using money from the strategic initiatives budget? In partnership with the Tyne and Wear fire and rescue service, the initiative ensures that CO detectors are fitted when fire safety checks are carried out on houses where vulnerable people live. We anticipate that 750 such detectors will be installed in four local authority wards. Is that not a tremendous example of how local authorities can work in partnership with the fire and rescue services to get CO detectors fitted in homes?

Tom Levitt: I thank my hon. Friend for that intervention, and I agree that it is a very welcome initiative. I have not heard of one on that scale before, and I hope that it is a precursor of things to come.
	Only one in five respondents to my questionnaire were tenants and most of them thought that their landlords had their central heating system serviced regularly, although I cannot be sure that the work is done to the legal standard. Every incident of CO poisoning that I have described could have been prevented by the use of electronic CO detectors with an audible alarm. For the record, they are much more reliable than the cheaper black spot detectors, which have no alarm. Because CO incidents can develop in minutes or hours, black spot detectors cannot be relied on to draw attention to danger when it arises.
	Before I complete my remarks, I wish to pay tribute to those who have assisted me in preparing for this debate. They include my hon. Friend the Member for Huddersfield (Mr. Sheerman) who, in his role as chair of the all-party parliamentary group on gas safety, organised the event last October, and my colleagues who have intervened so constructively tonight. I should also like to thank CORGI, British Gas, CO-Awareness and its president, Lynn Griffiths, as well as the Association of Personal Injury Lawyers, the practice of Russell Jones and Walker, and the people of High Peak who responded to my survey. In particular, I want to pay tribute to the steadfast commitment to the cause shown by David and Mary Jane Worswick, my constituents from Glossop who lost their daughter to CO poisoning almost exactly four years ago.
	In summary, I ask my hon. Friend the Minister to take action on six fronts. First, I hope that she will act to ensure a greater awareness of CO issues among householders, landlords, tenants, housing authorities, tour operators, emergency services and doctors. Secondly, given that one person in seven moves house each year, I hope that she will act to ensure that having a working CO monitor is compulsory when every house is built. That requirement could be included in building regulations. In addition, I hope that she will ensure that CO monitors are made compulsory when every house is sold, a provision that could be included in home information packs. Will she also ensure that CO monitors are required when caravans and mobile homes are sold or advertised for rent, as proposed by the hon. Member for Castle Point (Bob Spink), and when tenancies are changed? The advice from British Gas to prospective tenants is that if a landlord cannot show them a current gas safety certificate, they should not move into his property.
	Thirdly, will she encourage the industry to phase out smoke alarms in favour of combined smoke and CO alarms for domestic use at an affordable price? Fourthly, will she redouble efforts to replace all open flue boilers with the more energy-efficient and less dangerous balanced flue variety, especially for vulnerable groups? Fifthly, can she reduce the level of illegal gas fitting by enabling a greater chance of securing meaningful convictions for those whose action or negligence contributes to CO poisoning? Finally, will she ensure that installers of oil and solid fuel boiler systems are brought under a mandatory system of registration comparable to that which applies to gas installers?
	If those measures had been taken, my constituents Mary Ann Bailey and John Froggatt would be with us today. Mr. Froggatt would have been looking forward to his 73rd birthday in 2008, Mary Ann to her 20th. In one respect, these two have been spared a lifetime of the sort of disability, brain damage or incapacity that others have suffered from this completely avoidable source of poisoning, but that is little consolation to their families. They want to hear that the Government have learned lessons from their misfortunes, and that steps will be taken to ensure that deaths and injuries from carbon monoxide poisoning continue to fall.

Anne McGuire: I begin by commending my hon. Friend the Member for High Peak (Tom Levitt) for securing this important debate. It has given the House an opportunity to revisit the issue of gas safety in the home, to which the Government attach considerable importance. I also acknowledge the attendance of colleagues from all parties across the Housethe hon. Members for Colchester (Bob Russell), for Castle Point (Bob Spink), and for Wellingborough (Mr. Bone) and my hon. Friend the Member for Houghton and Washington, East (Mr. Kemp). It is unusual to see so many colleagues at an Adjournment debate at the end of business.
	The policy lead for this subject falls to my noble friend Lord McKenzie of Luton. He has taken a close personal interest in gas safety and is working closely with the Health and Safety Executive towards improvements for gas consumers. Like other hon. Members, I would like to offer my deepest condolences to my honourable Friend's constituents at High Peak, David and Mary Jane Worswick, who tragically lost their teenager daughter, Mary Ann Bailey together with her friend, Martin Taylor, to carbon monoxide poisoning almost four years ago, and to the other families sadly affected, to whom my hon. Friend referred.
	I am all too aware of the problem that can arise from defective gas appliances. As my hon. Friend the Member for Houghton and Washington, East highlighted, many of us have had experience of CO poisoning incidents. Some six years ago, two of my constituentstwo young studentsliving in rented accommodation died from CO fumes from a portable room heater. Indeed, when my daughter was sharing a flat as a student she was fortunately able to recognise the early symptoms of CO poisoning. It is something that touches us all.
	Let me assure the House that the Government are committed to playing their part in improving gas safety. For more than 20 years, domestic gas safety has been controlled within the framework of the Health and Safety at Work, etc. Act 1974. In that period, the resulting regime has undergone many reforms aimed at tightening gas safety standards for domestic consumers. As my hon. Friend has readily acknowledged, this legal framework has set the scene for a significant downward trend in the number of deaths due to CO poisoning from gas installations over the years. The most recent HSE figures provisionally show that there were eight deaths from CO poisoning related to gas installations during 2006-07the lowest figure on record. This compares with 16 for the previous year, and, as my hon. Friend highlighted, 10 years ago, the figure was more than three times that number.

Tom Levitt: It is important to put on record that the figure of eight relates to mains gas, so deaths such as that of Mr. Froggatt in his caravan would not be included in that figure.

Anne McGuire: I take my hon. Friend's point, and I recognise that mobile homes and caravans are a particular issue, as hon. Members have highlighted. We need to recognise the context: 22 million households, mobile homes and other places of abode use gas appliances. I suppose that we have to recognise that we have an encouraging, improving record, but we must also recognise that we cannot desist in our efforts to ensure that gas safety improves. The gas industry, gas safety campaign groups, and a host of other people, including many hon. Members, have helped to achieve that improved record, and I pay tribute to them for those efforts.
	However, as my hon. Friend explained, the Health and Safety Executive figures refer specifically to deaths related to gas installation work, and do not take account of carbon monoxide incidents arising from other fossil fuels. Those other incidents are no less important; they, too, involve human suffering. More needs to be done to improve public awareness of the risks of carbon monoxide poisoning from all fossil fuels, and to raise awareness of the benefits of using carbon monoxide alarms in the home. I shall come back to that subject.
	Although the legal framework has provided a context for improving gas safety over the years, unfortunately there are still cases in which the law has not been followed. Sometimes gas fitters are not registered or competent to carry out gas work safely. As has been said, sometimes landlords do not take their gas safety responsibilities seriously, and sometimes members of the public attempt do-it-yourself gas work, with dangerous consequences, or fail to get their appliances properly maintained by competent installers.
	When things go wrong and there are serious breaches of the law, enforcement action will be taken. Gas safety cases make up about 8 per cent. of all prosecutions brought by the HSE. They involve actions against landlords, individuals and installers. Registration with the Council for Registered Gas Installers, or CORGI, is a legal requirement for anyone installing or repairing fittings or appliances in homes. The aim of the gas installer registration scheme is to improve standards in the industry, and to help the public find and use safe and competent tradespeople. The HSE will hold all installers, registered or unregistered, to account for their actions if their work is found to be dangerously incompetent. If someone is not registered, it does not mean that the HSE will not pursue them if their work is dangerously incompetent.
	Some landlords and people undertaking gas work who have blatantly failed in their responsibilities have ended up in prison for causing deaths from dangerous gas appliances. Recent HSE initiatives against unregistered gas installers have led to the courts imposing sentences that generate significant local and national publicity on gas safety issues. Of course, that strengthens the deterrent to others who might think that they can install gas appliances. Sentencing is obviously a matter for the judiciary and the courts within the legislative and regulatory framework set by Parliament. Ministers and the HSE agree that the sentences or fines for health and safety offences can be too low, and do not always reflect the seriousness of the failure, as my hon. Friend has said.
	I should like to express my sympathy to Mr. and Mrs. Worswick for the protracted proceedings in their case, and for what was undoubtedly a wholly inadequate outcome, given the terrible circumstances of their daughter's death. As my hon. Friend may be aware, we have tried to introduce legislation to increase sentencing powers through the private Member's Bill route. I am pleased that my right hon. Friend the Member for Streatham (Keith Hill) is yet again to introduce a Bill to increase sentencing. If successful, it will raise the penalties for health and safety offences, and will make imprisonment more widely available for serious offences.
	I hope that all Members of the House, including those who raised technical or procedural issues to talk out a similar Bill that was introduced by my hon. Friend the Member for Caerphilly (Mr. David) will think seriously before they do so again. We want to see the Bill enacted.
	I can assure my hon. Friend the Member for High Peak that the Department of Health is committed to helping prevent deaths caused by carbon monoxide poisoning and to raising awareness of the dangers of poisoning. The chief medical officer has made a point of regularly bringing the issue of CO symptoms to the attention of the medical professionfor example, through his regular updates. The Department of Health recognises, as my hon. Friend indicated, that more needs to be done, working with the medical community, to raise their awareness of CO poisoning, and to provide practical advice on recognising symptoms to help them better diagnose CO poisoning. This is important, as CO poisoning can sometimes be confused with other ailments, such as flu. Recognising the symptoms of CO poisoning is not always easy.
	I welcome the Department of Health's decision to put out a call for funding research into carbon monoxide poisoning. Research undertaken by the Health and Safety Executive as part of its 2006 review of the domestic gas safety regime suggested that problems with chronic carbon monoxide poisoning may be more widespread than anticipateda point made by my hon. Friend. The new Department of Health call for research asks for proposals to investigate the incidence of carbon monoxide poisoning, both acute and chronic, and further work to help define the extent of the population at risk who use cooking or heating appliances that are faulty or installed incorrectly.

Fraser Kemp: Will the Minister convey my thanks and the thanks of many fire authorities in Britain for the help that the HSE has recently given with the production of 400,000 leaflets to raise awareness of the dangers of the silent killer, so that when fire checks take place in local communities, people also get information about the dangers?

Anne McGuire: Indeed. I know that a great deal of work on the matter has been done by the HSE and the fire and emergency services.
	The research will also call for proposals to assess the number of people experiencing carbon monoxide poisoning by looking at how many are admitted to hospital suspected of non-lethal poisoning, plus the number subsequently diagnosed. This will cover carbon monoxide poisoning from gas and other fossil carbon-based fuels. The results from the proposed research will help to give us better evidence on what is happening with CO exposure and inform us about what more needs to be done.
	I emphasise that although the evidence shows that the existing arrangements have helped to improve safety standards, the Government accept that more needs to be done. I welcome the new industry initiatives to exercise leadership in raising public awareness of the risks of other fossil fuels, as well as gas. As my hon. Friend rightly pointed out, these other fuels also present CO risks. The messages are similar to those for gas, and the public need to be fully aware of them.
	My hon. Friend raised specific issues, which I shall try to deal with. I shall follow up and write to him about those that I cannot cover now. We need to reinforce the message that householders should arrange to have their gas appliances regularly checked for safety by a CORGI-registered installer. Gas appliances should always be used correctly. They should never be used if there are any signs that they are not working. Approved carbon monoxide detectors with an audible alarm are highly recommended
	 The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Speaker  adjourned the House without Question put, pursuant to the Standing Order.
	 Adjourned at one minute to Eleven o'clock.